Wilbur wants a checking account with the lowest fees. Which checking account would be best for Wilbur?
A. Account A
B. Account B
C. Account C
Answer (1)
Account A has a monthly fee of $10 (waived with direct deposit), no ATM fees, and no annual fee.
Account B has no monthly fee, a $10 annual fee, and $3 ATM fees for non-ABC bank ATMs.
Account C has no monthly or annual fees, but charges $4 per ATM transaction.
Account D has no monthly fee, a $12 annual fee, and charges $3 per ATM transaction.
Without knowing Wilbur's banking habits, Account C is the best choice for the lowest possible fees, assuming he uses ATMs sparingly. A cco u n tC
Explanation
Understanding the Problem Wilbur wants a checking account with the lowest fees. We need to analyze the fee structure of each account to determine the best option for him.
Analyzing Account A Account A has a monthly fee of $10, which can be waived with direct deposit. It has no ATM fees and no annual fee. The overdraft fee is the account balance or $40, whichever is less.
Analyzing Account B Account B has no monthly fee, but it has a $10 annual fee. ATM usage is free at ABC bank ATMs but $3 for non-ABC bank ATMs. The overdraft fee is not specified, but it is simply 'overdraft'.
Analyzing Account C Account C has no monthly fee, no annual fee. ATM usage fee is $4 per transaction. The overdraft fee is not specified, but it is simply 'overdraft'.
Analyzing Account D Account D has no monthly fee, and an annual fee of $12. ATM usage fee is $3 per transaction. The overdraft fee is not specified, but it is simply 'overdraft'.
Comparing the Accounts To determine the best account, we need to consider Wilbur's banking habits. Let's consider a few scenarios:
Scenario 1: Wilbur uses direct deposit, rarely uses ATMs, and never overdrafts. In this case, Account A would have no monthly fee and no ATM or overdraft fees, so the total annual fee would be $0. Account B would have a $10 annual fee. Account C would have no annual fee. Account D would have a $12 annual fee. In this scenario, Account A or Account C would be the best.
Scenario 2: Wilbur does not use direct deposit, rarely uses ATMs, and never overdrafts. In this case, Account A would have a $10 monthly fee, totaling $120 annually. Account B would have a $10 annual fee. Account C would have no annual fee. Account D would have a $12 annual fee. In this scenario, Account B, Account C, or Account D would be the best.
Scenario 3: Wilbur frequently uses ATMs (non-ABC bank ATMs for Account B) and never overdrafts. Account A: $0 ATM fees Account B: $3 per non-ABC ATM transaction + $10 annual fee Account C: $4 per ATM transaction Account D: $3 per ATM transaction + $12 annual fee
Scenario 4: Wilbur overdrafts frequently. Account A: Overdraft fee is the account balance or $40, whichever is less. Account B, C, D: Overdraft fee is 'overdraft', which is unspecified.
Determining the Best Account Without knowing Wilbur's banking habits, it's difficult to definitively say which account is best. However, if Wilbur uses direct deposit and rarely uses ATMs, Account A or Account C would likely be the best. If Wilbur does not use direct deposit and rarely uses ATMs, Account C would likely be the best.
Final Answer Based on the information provided, and assuming Wilbur wants the account with the absolute lowest possible fees, Account C is the best choice, as it has no monthly or annual fees, and the only fees he would incur would be from ATM usage.
Examples
Choosing a checking account is similar to selecting a phone plan. You need to consider your usage habits to minimize costs. For example, if you rarely make calls or use data, a basic plan with low monthly fees is best. Similarly, if you frequently use data, an unlimited plan might be more cost-effective. By analyzing your needs, you can avoid unnecessary expenses and choose the most suitable option.
