this table shows checking account features and fees for two banks in madison county. northeast citizens…

this table shows checking account features and fees for two banks in madison county. northeast citizens bank: checking account services - free with monthly direct deposit, otherwise, $7 per month; atm transaction (bank atm) - no atm fees; atm transaction (nonbank atm) - $1 per transaction; per - transaction debit card fee - $0.50 per transaction. madison savings bank: checking account services - free for veterans, otherwise, $3 per month; atm transaction (bank atm) - no atm fees; atm transaction (nonbank atm) - $2.50 per transaction; per - transaction debit card fee - 6 free transactions per month, $1 for each transaction after the 6th one. tim wants to open a checking account. he plans to have his paycheck deposited directly into this account. tim uses his debit card to pay for food, clothes, and other supplies about 10 times per month. he never uses an atm and is not a veteran. which bank is the better choice for tim? northeast citizens bank madison savings bank

this table shows checking account features and fees for two banks in madison county. northeast citizens bank: checking account services - free with monthly direct deposit, otherwise, $7 per month; atm transaction (bank atm) - no atm fees; atm transaction (nonbank atm) - $1 per transaction; per - transaction debit card fee - $0.50 per transaction. madison savings bank: checking account services - free for veterans, otherwise, $3 per month; atm transaction (bank atm) - no atm fees; atm transaction (nonbank atm) - $2.50 per transaction; per - transaction debit card fee - 6 free transactions per month, $1 for each transaction after the 6th one. tim wants to open a checking account. he plans to have his paycheck deposited directly into this account. tim uses his debit card to pay for food, clothes, and other supplies about 10 times per month. he never uses an atm and is not a veteran. which bank is the better choice for tim? northeast citizens bank madison savings bank

Answer

Explanation:

Step1: Calculate monthly cost for Northeast Citizens Bank

Since Tim has direct - deposit, the checking account is free. The per - transaction debit card fee is $0.50 per transaction and he uses the debit card 10 times a month. So the monthly cost $C_{1}=0.50\times10 = 5$ dollars.

Step2: Calculate monthly cost for Madison Savings Bank

The checking account costs $3 per month as Tim is not a veteran. He has 10 debit - card transactions. He gets 6 free transactions, so he pays for $10 - 6=4$ transactions. The per - transaction fee after 6 transactions is $1 per transaction. So the monthly cost $C_{2}=3+(10 - 6)\times1=3 + 4=7$ dollars.

Step3: Compare the costs

Since $C_{1}=5$ dollars and $C_{2}=7$ dollars, and $5<7$.

Answer:

Northeast Citizens Bank