Question

Lin's sister has a checking account. If the account balance ever falls below zero, the bank charges her a fee of $5.95 per day. Today, the balance in Lin's sister's account is -$2.67. In 14 days, Lin's sister will be paid $430 and will deposit it into her checking account. If there are no other transactions besides this deposit and the daily fee, will Lin continue to be charged $5.95 each day after this deposit is made? Explain or show your reasoning.

Answer 1

Answer: No, the bank will not keep charging her the $5.95 after the deposit is made.

Explanation:

Today, Lin's sister's balance is -$2.67

She gets charged $5.95 per day.

There are 14 days until she can charge some money in the bank account, so the bank will charge $5.92 14 times

So her balance after 14 days will be:

Balance = -$2.67 - $5.95*14 = -$85.97

When she charges the $430 in the account, her balance will be:

Balance = -$85.97 + $430 = $344.03

So now she has a positive balance, which means that the bank does not charge her anymore.