Question

Review the table with fees for Bank A and Federal Credit Union (FCU) B.

	​Bank A	​FCU B
​Monthly Fee	​$5.00​$5.00 when ending balance is less than $1000.00$1000.00	​$10.00​$10.00 to open with no monthly fees
​Minimum Balance	​No minimum required	​$50.00​$50.00
​ATM Fee	​2020 free, then $2.50$2.50 at any ATMs	​Free at FCU ATMs, $2.00$2.00 at non-FCU ATMs
​Check Fee	​3030 free checks per month	​Unlimited free checking
​Overdraft Fee	​$25.00​$25.00 per overdraft	​$10.00$10.00 for first; $30.00$30.00 for all others
​Interest on Balance	​0.2%0.2% monthly interest for the whole month if ending balance is greater than $500.00$500.00	​0.3%0.3% monthly interest for the whole month if ending balance is greater than $1000.00$1000.00

Which statements are true? Select all that apply.

FCU B offers a better option for using checks.

An ending balance of $2000.00$2000.00 at FCU B earns $6.00.$6.00.

FCU B does not charge for cash withdrawals at any ATM.

Three overdrafts per month cost more at Bank A.

An ending balance of $2000.00$2000.00 at Bank A earns $40.00.$40.00.

An ending balance of $250.00$250.00 at Bank A costs $5.00.$5.00.

The total cost of using Bank A is more than using FCU B.

Two overdrafts per month cost more at FCU B.

Answer 1

Ans:

Following statements are true:

1.FCU B offers better option for using checks.

2. An ending balance of $2000 at FCU B earns $6

3. Three overdraft per month cost more at Bank A

4. Ending balance of $250 cost $5 at bank A.

REASONS:

1. Bank B offers unlimited checkings whereas Bank A offers only 30 free checkings per month.

2. Ending balance of FCU B earns = ( $2000 × 0.3%) = $6

3. Three overdraft bank A cost per month= $25 × 3 =$75 whereas FCU B cost per month = ($10 + $30 + $30) =$70

4. If ending balance less than $ 1000 it cost $ 5 at bank A.

Other options:

1. FCU B charge $2 for non FCU ATM.

2 .Total cost is more at FCU B

3. Ending balance of $2000 earns interest = ($2000 × 0.2%) = $4.

4. Two overdraft cost more at Bank A because Bank A = ($ 25 × 2) =$50 and FCU B = ($10 + $30) =$40.