jack is considering a list of features and fees for current bank:\n| feature | description | fees | amount…
jack is considering a list of features and fees for current bank:\n| feature | description | fees | amount |\n|--|--|--|--|\n| checking account | free with direct deposit of paycheck | non - sufficient funds | $32 |\n| savings account | 1st account free, each additional account $4/month | 2nd copy of statement | $3 |\n| online services | free with all checking and savings accounts | network atm usage | first 2 per month free, $3 for each additional transaction |\njack plans on using network atms about 4 times per month. what would be jacks total estimated annual fees for a checking account with direct paycheck deposit, one overdraft per year, and no 2nd copies of statements?\n a. $44\n b. $104\n c. $144\n d. $176
Answer
Explanation:
Step1: Calculate monthly Network ATM usage fees.
Jack uses the ATM 4 times per month. The first 2 are free, so he pays for $4 - 2 = 2$ transactions. The fee is $3 per additional transaction. $$ \text{Monthly ATM Fee} = (4 - 2) \times $3 = 2 \times $3 = $6 $$
Step2: Calculate annual Network ATM usage fees.
Multiply the monthly ATM fee by 12 months. $$ \text{Annual ATM Fee} = $6/\text{month} \times 12 \text{ months/year} = $72 $$
Step3: Calculate annual Non-sufficient funds (overdraft) fees.
Jack has one overdraft per year, with a fee of $32. $$ \text{Annual Overdraft Fee} = 1 \times $32 = $32 $$
Step4: Calculate annual fees for 2nd copies of statements.
Jack requests no 2nd copies of statements. $$ \text{Annual Statement Fee} = 0 \times $3 = $0 $$
Step5: Calculate total estimated annual fees.
Sum the annual fees for ATM usage, overdrafts, and statement copies. The checking account itself is free due to direct deposit. $$ \text{Total Annual Fees} = \text{Annual ATM Fee} + \text{Annual Overdraft Fee} + \text{Annual Statement Fee} $$ $$ \text{Total Annual Fees} = $72 + $32 + $0 = $104 $$
Answer:
b. $104