Question

Sharon wants to open a checking account from which to pay bills. She wants online services, and a debit card, which both banks provide for free. Based upon past experience, she expects to accidentally overdraft the account 1 time per year, due to unexpected charges and miscommunications. She expects no 2nd copies of statements, and to use network ATMs 4 times per month with either bank. She has $3300 in an emergency savings account at First State Bank, and thinks that the balance will be enough to cover overdrafts in the future if automatic transfers are made when needed.

Answer 1

Sharon wants to open a checking account from which to pay bills. She wants online services, and a debit card, which both banks provide for free. Based upon past experience, she expects to accidentally overdraft the account 1 time per year, due to unexpected charges and miscommunications. She expects no 2nd copies of statements, and to use network ATMs 4 times per month with either bank. She has $3300 in an emergency savings account at First State Bank, and thinks that the balance will be enough to cover overdrafts in the future if automatic transfers are made when needed.

A 4-column table with 5 rows. Column 1 is labeled First State Bank with entries monthly fee, non-sufficient funds fee, second copy of statement, network A T M usage, non-sufficient funds protection from a First State Bank savings account. Column 2 is labeled Description with entries 4 dollars, 36 dollars, 7 dollars, 3 dollars each transaction, 4 dollars on each day that a transfer occurs to cover an overdraft. Column 3 is labeled Common Bank with entries monthly fee, non-sufficient funds, second copy of statement, network A T M usage, non-sufficient funds protection from a Common Bank savings account. Column 4 is labeled Description with entries 0 dollars, 24 dollars, 4 dollars, 2 dollars each transaction, not offered with this account.

Based on the tables of fees, above, if Sharon chooses First State Bank, will it save her money over choosing Common Bank?

• a. No, Common Bank will save Sharon more money. <<<---Correct
• b. Yes, First State Bank will save Sharon money.
• c. No, First State Bank and Common Bank would have the same costs for Sharon.
• d. No, costs cannot be estimated in advance, so this information cannot be used.

Explanation:

Edge 2021

Answer 2

a.No, Common Bank will save Sharon more money.

Explanation:

There are two banks i.e. first state bank and the common bank that should be compared in the table depend upon the prices of both the banks

On seeing it we get to know that the first state bank would charged a fee on a monthly basis i.e. $4 while on the other hand the common bank has no fee on the monthly basis

Also the unsufficient bonds are more cheaper in the common bank if we compared with the first state bank

Moreover, the $7 is charged in the first state bank and $3 charged in the common bank.

Therefore the common bank would become cheaper

Hence, the correct option is a.