Question

The following transactions, in order, are expected to hit your checking account next month: $30 deposit, $20 withdrawal, $30 withdrawal, $40 deposit, and $50 withdrawal. What is the least amount you can have as a beginning balance without overdrawing the account?

Answer 1

The correct answer is:

$30.

Explanation:

Writing the transaction amounts as signed integers, we have:

+30, -20, -30, +40, -50

We want to add these together. Addition is commutative, which means we can add the positive integers before the negative:

30+40+(-20)+(-30)+(-50)

70+(-20)+(-30)+(-50)

We can now add the negative integers together:

70+(-50)+(-50)

70+(-100)

Adding these together, we have

-30

This means we would need at least $30 to avoid overdrafting the account.