Question

Checking account A charges a monthly service fee of $12 and a wire transfer
fee of $10.50, while checking account B charges a monthly service fee of $21
and a wire transfer fee of $8.50. Which checking account is the better deal if
4 wire transfers are made per month?
A. Checking account B IS the better deal, because its total monthly
fees amount to $55, while those for checking account A amount to
$54.
B. Checking account B is the better deal, because its total monthly
fees amount to $54, while those for checking account A amount to
$55.
C. Checking account A is the better deal, because its total monthly
fees amount to $55, while those for checking account B amount to
$54.
c
D. Checking account A is the better deal, because its total monthly
fees amount to $54, while those for checking account B amount to
$55.

Answer 1

For only 4 wire transfers, Checking account A has a monthly fee of $54, while checking account B has a monthly fee of $55, so the correct option is D.

Which checking account is better?

Checking account A charges a monthly fee of $12, plus $10.50 for each wire transfer, then the total cost if you make 4 wire transfers is:

C = $12 + $10.50*4 = $54

For checking account B, we have a fixed cost of $21, plus $8.50 per each wire transfer, then the total cost for 4 wire transfers is:

C'  = $21 + 4*$8.50  = $55

So, if you make only 4 wire transfers per month, checking account A is a better option.

Then we can see that the correct option is D.

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