You are looking for a bank in which to open a checking account for your new part-time business. You estimate that in the first year, you will be writing 30 checks per month and will make three debit transactions per month. Your average daily balance is estimated to be $900 for the first six months and $2,400 for the next six months.Use the following information to solve the problem.BankMonthly Fees and ConditionsBank 1$16.00 with $1,000 min. daily balance-or-$25.00 under $1,000 min. daily balanceBank 2$4.50 plus $0.40 per check over 10 checks monthly$1.00 per debit transactionBank 3$5 plus $0.25 per check$2.00 per debit transactionBank 4$8 plus $0.15 per check$1.50 per debit transaction(a)Calculate the cost (in $) of doing business with each bank for a year. Bank 1 Bank 2 Bank 3 Bank 4 (b)Which bank should you choose for your checking account?Bank 1Bank 2 Bank 3Bank 4

Cost (in $) of doing business with each bank for a year: Bank 1: Since average daily balance is…

Answered: You are looking for a bank in which to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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You are looking for a bank in which to open a checking account for your new part-time business. You estimate that in the first year, you will be writing 30 checks per month and will make three debit transactions per month. Your average daily balance is estimated to be $900 for the first six months and $2,400 for the next six months.

Use the following information to solve the problem.

Bank	Monthly Fees and Conditions
Bank 1	$16.00 with $1,000 min. daily balance -or- $25.00 under $1,000 min. daily balance
Bank 2	$4.50 plus $0.40 per check over 10 checks monthly $1.00 per debit transaction
Bank 3	$5 plus $0.25 per check $2.00 per debit transaction
Bank 4	$8 plus $0.15 per check $1.50 per debit transaction

(a)

Calculate the cost (in $) of doing business with each bank for a year.

Bank 1

Bank 2

Bank 3

Bank 4

(b)

Which bank should you choose for your checking account?

Bank 1

Bank 2

Bank 3

Bank 4

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