Answer:
Step-by-step explanation:
1. Local savings account
- Investment: $2,000
- Annual interest: 2.2% × $2,000 = 0.022 × $2,000 = $44
- Total value: $2,000 + $44 = $2,044.
2. Online savings account
- Investment: $2,000
- Annual interest: 4.85% × $2,000 = 0.0485 × $2,000 = $97
- Charges for ATM withdrawal: 3x
- Total value: $2,000 + $97 - 3x = $2,097 - 3x
3. How many ATM withdrawals must Gareth make every year for the local savings account to be a better deal than the online savings account?
Solve the inequality:
- 2,044 > 2,097 - 3x
- 3x > 2,097 - 2,044
- 3x > 53
- x > 53/3
- x > 17.67
Thus, Gareth has to make 18 ATM withdrawals in a year for the local savings account to be a better deal than the online savings account.