Allison Is a Recent College Graduate and Is Looking for a Bank

question 85

Essay

Allison is a recent college graduate and is looking for a bank in which to open a checking account.She has narrowed her choice to two.First National requires a $100 minimum deposit and charges 15 cents per check.City Bank requires a $500 minimum deposit,but charges only 5 cents per check.Both pay the same interest rate on the minimum deposit.Allison estimates that she will write 40 checks per month.Assuming that Allison could invest any funds not required for a minimum deposit in a one-year CD paying 6 percent,what would be the monthly cost to Allison for First National and City Bank? Which should she choose?
(a)First National -$6.00; City Bank -$2.00
(b)First National -$6.00; City Bank -$4.00
(c)First National -$6.00; City Bank -$26.00
(d)First National -$6.00; City Bank -$8.00