You have $6,500 to deposit. If you deposit the money in a savings account at your local bank, you will earn 1.45% annual interes
t and will be able to make ATM withdrawals at your bank's ATMs. If you deposit the money in an online savings account, you will earn 2.25% interest, but you will be charged $4 every time you make an ATM withdrawal. Assuming that your ATM withdrawals do not reduce the amount of interest you earn, how many ATM withdrawals must you make in a year for the local savings account to be a better deal than the online savings account? a.
5
b.
12
c.
14
d.
10
The amount earned from the local account must be greater than that of the online account. Amount from local account = 6,500(1.0145)ⁿ Amount from online account = 6,500(1.0225)ⁿ - 4x Where n is the number of years and x is the number of ATM withdrawals.
6,500(1.0145)ⁿ > 6,500(1.0225)ⁿ - 4x 4x > 6,500[(1.0225)ⁿ - (1.0145)ⁿ]; n = 1 x > 13 The number of withdrawals must exceed 13.
Ask her why she is crying. If she explains why, listen and comfort her. If she says to "go away" or "i don't want to talk about it," give her space and come back later. She needs to let it out, so have patience :)