Question

A bank charges a fee of $3.50 each month for a checking account. If the account has a balance of $32 and there are no transactions except for the monthly service fee, how long will it be until the account has a negative balance?

Answer 1

It will take 10 months until the account has a negative balance.

Explanation:

To determine how long it will be until the account has a negative balance, you need to calculate how many months it takes for the service fee to deplete the account balance.

Starting balance: $32

Monthly service fee: $3.50

To find out how many months it takes until the account balance becomes negative, divide the starting balance by the monthly fee:

$32 ÷ $3.50 ≈ 9.14

Since you can't have a fraction of a month, you'll need to round up to the nearest whole number because the account balance will become negative in the following month.

So, it will take 10 months for the account balance to become negative when there are no transactions except for the monthly service fee.