James wants an account with the lowest fees. Which checking account would be best for James?
Account A
Account B
Account C
Account D
Answer (1)
If James uses direct deposit, Account A has the lowest fees at $0.
If James does not use direct deposit, Account B has the lowest fees at $36.
Assuming James uses direct deposit, Account A is the best option.
Therefore, the best checking account for James is Account A. A cco u n t A
Explanation
Analyzing the Problem We need to determine which checking account has the lowest fees for James. We will analyze each account's fees to find the best option.
Account A Fees Account A has a monthly fee of $10 or $0 with direct deposit and no annual fee. If James uses direct deposit, the annual fee is $0. If not, the annual fee is $10 \times 12 = $120.
Account B Fees Account B has a monthly fee of $0 and an annual fee of $36.
Account C Fees Account C has a monthly fee of $10 and no annual fee. The annual fee is $10 \times 12 = $120.
Account D Fees Account D has a monthly fee of $12 and no annual fee. The annual fee is $12 \times 12 = $144. Additionally, there is a $0.50 fee per online bill payment.
Comparing Fees with Direct Deposit If James uses direct deposit, Account A has $0 in fees. Account B has $36 in fees. Account C has $120 in fees. Account D has $144 plus $0.50 per online transaction. In this case, Account A is the best option.
Comparing Fees without Direct Deposit If James does not use direct deposit, Account A has $120 in fees. Account B has $36 in fees. Account C has $120 in fees. Account D has $144 plus $0.50 per online transaction. In this case, Account B is the best option.
Determining the Best Account Since James wants the account with the lowest fees, and Account A is the best option if he uses direct deposit, and Account B is the best option if he does not use direct deposit, we need to consider if direct deposit is an option for James. If direct deposit is an option, Account A is the best. If not, Account B is the best. However, the question does not specify whether James will use direct deposit or not. Assuming James uses direct deposit, Account A is the best option.
Final Answer Assuming James uses direct deposit, the account with the lowest fees is Account A.
Examples
Choosing a checking account is similar to deciding on a phone plan. You need to consider monthly fees, data limits, and extra charges. Just like comparing different phone plans to find the cheapest one for your needs, you compare checking accounts to find the one with the lowest fees based on your usage habits. Understanding these costs helps you manage your finances effectively.
