A bank customer currently maintains a checking account

Assignment Help Mathematics
Reference no: EM13710181

Consider the following situation: A bank customer currently maintains a checking account balance of $5000 so that she does not have to pay monthly maintenance charges or per-debit charges. She writes about 20 checks a month for a total of about $2100. If she kept only that amount in her checking account, she would have to pay a monthly maintenance fee of $20 plus a $.20/check charge.
Which of the following choices do you think this customer should make:
• Open a savings account at the bank at 5 percent interest. Keep her extra money there and have the bank transfer funds from the savings account in the case of an overdraft. The bank does not charge for transfers but allows only two per month.
• Put the extra money in a money market account that earns about 8 percent. This account allows only a limited number of checks to be written each month.

  • Keep things as they are.


Consider these questions as you make your recommendation:

  • What else would it be good to know about the customer's check-writing habits?
  • How much in fees will it cost to keep the checking account balance as low as possible?
  • How much interest will she earn with the interest-bearing checking account option?

• How much more interest would she earn if the extra money was in a money market account rather than in the bank's savings account?
• About how many checks would she have to write each month for it to be obviously better to have a checking account with no per-check charge?

 

Reference no: EM13710181

Questions Cloud

Explanation about lowest total cost : A company that produces pleasure boats has decided to expand one of its lines. Current facilities are insufficient to handle the increased workload, so the company is considering three alternatives.
Following cost and revenue functions : An entrepreneur has the following cost and revenue functions: TC = 30 + 3Q and TR = 4Q. calculate the equilibrium quantity algebraically and graphically at the break-even point.
Explore steven''s four levels of measurement : Give examples of Stevens' four levels of measurement, such as nominal, ordinal, interval, and ratio scales.
Capacity utilization rate calculations : A manufacturing Shop is designed to operate most efficiently at an output of 550 units per day. In the past month the plant produced 490 units. What was its capacity utilization rate last month.
A bank customer currently maintains a checking account : Consider the following situation: A bank customer currently maintains a checking account balance of $5000 so that she does not have to pay monthly maintenance charges or per-debit charges. She writes about 20 checks a month for a total of about..
Describe efficient capital markets - financial reporting : What is the role of honesty, transparency, and accountability in institutional financial reporting. Why is providing legal and ethical fiscal reporting to stakeholders important.
Discover the secrets of their success : Make an arrangement to talk to someone whose leadership style you admire. Discover the secrets of their success. Problems encountered and how they managed to solve it.
Suppose the mean sat score for a students admitted : Suppose the mean SAT score for a students admitted to a university is 1000, with a standard deviation of 200. Suppose that a student is selected at random. If the scores are normally distributed, find the probability (percentage) that the student's S..
Define cost - benefit analysis : Analysis on cost benefit analysis and how cities can use cost benefit analysis to accurately predict the value of a project.

Reviews

Write a Review

Mathematics Questions & Answers

  Cuisenaire rod problems-fibonacci numbers

How many different trains of white (1x1) and/or red (1x2) rods are there of a given length N? Find at least 2 ways to justify your solution

  Each participant in study was asked to answer questions

does the use of cell phones lead to a higher incidence of brain cancer? people with brain cancer were matched with

  Is the p -value small enough that we should reject h0

Significant. In this example, the P -value is 0.1446. (h) State the conclusion in statistical terms and in regular English. Is the P -value small enough that we should reject H0 ?

  How many additional parts must the company sell

the company is considering increasing its advertising by $50,000 in order to sell more car parts. How many additional parts must the company sell in order to justify the increased advertising costs?

  What is the diameter of the wheel

Deon races his bicycle for . A wheel of his bicycle turns times as the bicycle travels this distance. What is the diameter of the wheel?

  Solve the heat equation

Solve The heat equation du/dt = d^2u / dx^2 (note: partial derivatives), u(x, 0) = sin^2(x), u(0, t) = 0, u(Pi, t) = 0, 0

  Is there a production level that minimizes average cost

Suppose C(x) = x^3-6X^2+15X where x represents thousands of units. Is there a production level that minimizes average cost? If so what it it?

  Explain the concept of a strong correlation begin

If +.75 represents a "strong" positive correlation, where does the concept of a "strong" correlation begin?

  The percentage of women in military who serve on active

the percentage of women in the military who serve on active duty has been steadily increasing. the number of women n on

  Determine the entering variable and leaving variable

Transform the following linear programming model into proper form for solution by the simplex method (including the artificial variable) and generate the initial simplex tableau. Determine the entering variable and leaving variable.

  How high does it go before returning to the ground

A grapefruit is tossed straight up with an initial velocity of 27 ft/sec. The grapefruit is 3 feet above the ground when it is released. Its height at time t is given by y=-16(t^2)+27t+3. How high does it go before returning to the ground?

  Final solutions as decimal approximations

Present your final solutions as decimal approximations carried out to the third decimal place. Due to the nature of these solutions, no check is required.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd