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Bank A charges a $2 fee each time a customer withdraws money from an out-of-network ATM. They also charge a $12 monthly service fee. If your withdrawals at out-of-network ATMs exceed $12, the monthly service fee is waived.

Bank B does not charge a fee for withdrawing money from an out-of-network ATM, but instead charges a $20 monthly fee. Bank B also limits you to 10 free ATM withdrawals per month. After 10 ATM withdrawals, they automatically charge a one-time fee of $5, no matter how many ATM withdrawals you make.

You and a friend are on vacation. You bank with Bank A. You withdraw money from an out-of-network ATM 14 times. Your friend banks with Bank B. He withdraws money from an ATM 22 times.

Which statement below is true?

(1 point)
Responses

You paid $28 in bank fees. Your friend paid $30 in bank fees.
You paid $28 in bank fees. Your friend paid $30 in bank fees.

You paid $28 in bank fees. Your friend paid $25 in bank fees.
You paid $28 in bank fees. Your friend paid $25 in bank fees.

You paid $40 in bank fees. Your friend paid $25 in bank fees.
You paid $40 in bank fees. Your friend paid $25 in bank fees.

You paid $25 in bank fees. Your friend paid $28 in bank fees.

1 answer

Let's calculate the bank fees for you and your friend step by step.

For You (Bank A):

  • Withdrawal Fees: You withdrew money 14 times from an out-of-network ATM, and Bank A charges $2 per withdrawal.
    • Withdrawal Fees = 14 withdrawals * $2 = $28
  • Monthly Service Fee: The monthly service fee is $12, but since your withdrawals exceed $12, the service fee is waived.
    • Total Fees = $28 (withdrawal fees) + $0 (waived service fee) = $28

For Your Friend (Bank B):

  • Monthly Fee: Bank B charges a flat monthly fee of $20.
  • Withdrawal Fees: Your friend withdrew 22 times. The first 10 withdrawals are free, so the remaining withdrawals will incur a fee.
    • Free Withdrawals = 10
    • Paid Withdrawals = 22 - 10 = 12
    • Since he has exceeded 10 withdrawals, he will pay a one-time fee of $5 after the 10th withdrawal.
    • Total Fees = $20 (monthly fee) + $5 (for excess withdrawals) = $25

Now let's compare:

  • You (Bank A) paid $28 in fees.
  • Your friend (Bank B) paid $25 in fees.

Thus, the correct statement is: You paid $28 in bank fees. Your friend paid $25 in bank fees.