Maggie Wants to Open a Checking Account That Will Be

question 93

Essay

Maggie wants to open a checking account that will be the least expensive given her normal financial transactions.She typically writes 15 checks a month and uses an ATM 35 times a month.Her minimum checking balance falls to about $350 in an average month.Which of the following accounts would be least expensive for Maggie? (Show all your work.)
Account A:
∙No monthly fee is charged if a minimum balance of at least $300 is maintained.
∙A $5.00 fee is charged in any month the minimum balance falls below $300.
∙An ATM fee of $0.10 per transaction is charged on all transactions.
Account B:
∙No monthly fee is charged if a minimum balance of at least $500 is maintained.
∙A $3.00 fee plus $0.10/check is charged in any month the minimum balance falls below $500.
∙There is no ATM fee on transactions.

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Definitions:

Marginal Product

The increase in output resulting from a one-unit increase in the input, keeping all other inputs constant.

Factor X

A placeholder term for an unspecified or unknown factor that can influence outcomes in a given situation or calculation.

Production Function

A production function is an equation that relates the quantity of output produced to the quantities of inputs used in production.

Factors Of Production

The inputs or resources that are used in the process of producing goods and services, typically including labor, capital, land, and entrepreneurship.