Lorenzo is deciding between two banks for his chequing account.Thrift Bank requires a minimum deposit of $100,charges a monthly fee of eight dollars,plus $0.50 per cheque.Merchants Bank also requires a minimum deposit of $100,charges no monthly fee,but charges $1.00 per cheque.How many cheques would Lorenzo need to write each month to make Thrift Bank less expensive to use than Merchants Bank?

Question

Quizplus · Accepted Answer

Lorenzo would need to write 16 cheques each month to make Thrift Bank less expensive to use than Merchants Bank. This is because the monthly fee at Thrift Bank is $8, while the monthly fee at Merchants Bank is $0. The per-cheque fee at Thrift Bank is $0.50, while the per-cheque fee at Merchants Bank is $1.00. So, if Lorenzo writes 16 cheques each month, he will pay $8 + (16 x $0.50) = $16 at Thrift Bank, while he will pay (16 x $1.00) = $16 at Merchants Bank.

Lorenzo Is Deciding Between Two Banks for His Chequing Account