Question

Joey has a checking account that charges him $3 per month and gives him up to eight free checks or ATM withdrawals every month. He then has to pay $1 for every additional check that he writes or ATM withdrawal he makes for the rest of the month. If he writes 9 checks per month and uses the ATM machine 4 times per month, what does his checking account cost per year?

Answer 1

His checking account will cost $96 each year.

Calculation: First off, we find out how much he spends in a year regardless, so $3 x 12 = $36 each year. Next, we find out how much he is charged based on his withdraws and checks by adding his monthly checks to his monthly ATM withdrawals to get $13. Then we subtract $13 by $8 to get $5 because he has to pay $1 per transaction after 8 free transactions each month. Now that we have his additional monthly spending, we multiply the additional $5 by 12 to get $60 per year. Finally, we add the yearly base fee of $36 to the additional yearly fee of $60 to get: $96 each year.