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Sagot :
To determine which bank saves Sharon money, we need to calculate the total annual cost for each bank based on her expected banking habits:
### First State Bank Costs
1. Monthly Fee:
- \$4 per month
- Annual cost: \[tex]$4 12 = \$[/tex]48
2. Overdraft Fee:
- \$36 per overdraft
- Annual cost: \[tex]$36 1 = \$[/tex]36
3. Automatic Transfer Fee (to cover overdraft):
- \$4 per transfer
- Annual cost: \[tex]$4 1 = \$[/tex]4
4. Network ATM Usage Fee:
- \$3 per transaction
- Expected use: 4 times per month
- Annual cost: \[tex]$3 4 12 = \$[/tex]144
Adding up all the costs for First State Bank:
Total Annual Cost = \[tex]$48 (monthly fees) + \$[/tex]36 (overdraft fee) + \[tex]$4 (transfer fee) + \$[/tex]144 (ATM fees) = \$232
### Common Bank Costs
1. Monthly Fee:
- \$0 per month
- Annual cost: \[tex]$0 12 = \$[/tex]0
2. Overdraft Fee:
- \$24 per overdraft
- Annual cost: \[tex]$24 1 = \$[/tex]24
3. Network ATM Usage Fee:
- \$2 per transaction
- Expected use: 4 times per month
- Annual cost: \[tex]$2 4 * 12 = \$[/tex]96
Adding up all the costs for Common Bank:
Total Annual Cost = \[tex]$0 (monthly fees) + \$[/tex]24 (overdraft fee) + \[tex]$96 (ATM fees) = \$[/tex]120
### Comparison
- Total Annual Cost for First State Bank: \$232
- Total Annual Cost for Common Bank: \$120
By comparing the total annual costs, we see that it is more expensive for Sharon to use First State Bank. Therefore, choosing First State Bank will not save her money compared to Common Bank. The savings by choosing Common Bank would be \[tex]$232 - \$[/tex]120 = \$112 annually.
### First State Bank Costs
1. Monthly Fee:
- \$4 per month
- Annual cost: \[tex]$4 12 = \$[/tex]48
2. Overdraft Fee:
- \$36 per overdraft
- Annual cost: \[tex]$36 1 = \$[/tex]36
3. Automatic Transfer Fee (to cover overdraft):
- \$4 per transfer
- Annual cost: \[tex]$4 1 = \$[/tex]4
4. Network ATM Usage Fee:
- \$3 per transaction
- Expected use: 4 times per month
- Annual cost: \[tex]$3 4 12 = \$[/tex]144
Adding up all the costs for First State Bank:
Total Annual Cost = \[tex]$48 (monthly fees) + \$[/tex]36 (overdraft fee) + \[tex]$4 (transfer fee) + \$[/tex]144 (ATM fees) = \$232
### Common Bank Costs
1. Monthly Fee:
- \$0 per month
- Annual cost: \[tex]$0 12 = \$[/tex]0
2. Overdraft Fee:
- \$24 per overdraft
- Annual cost: \[tex]$24 1 = \$[/tex]24
3. Network ATM Usage Fee:
- \$2 per transaction
- Expected use: 4 times per month
- Annual cost: \[tex]$2 4 * 12 = \$[/tex]96
Adding up all the costs for Common Bank:
Total Annual Cost = \[tex]$0 (monthly fees) + \$[/tex]24 (overdraft fee) + \[tex]$96 (ATM fees) = \$[/tex]120
### Comparison
- Total Annual Cost for First State Bank: \$232
- Total Annual Cost for Common Bank: \$120
By comparing the total annual costs, we see that it is more expensive for Sharon to use First State Bank. Therefore, choosing First State Bank will not save her money compared to Common Bank. The savings by choosing Common Bank would be \[tex]$232 - \$[/tex]120 = \$112 annually.
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