[Anonymous]

Abbreviated question: Kemple plans to keep a $500 minimum balance and writes about 80 checks per month. Kemple’s cost of funds is 10% He has 2 options

Option 1, the bank charges $10 per month plus a 10 cent per check charge. No minimum balance.

Option 2, premium account, require $2500 minimum balance but no fee or per check charges.

Which option should he choose?

Answer: Premium account, because the savings is $16 per year. THe standard account wil cost $18 per month (10 + 80 * 0.10) or $216 per year. THe premium account will have no fee but will require an additional $2000 of funds ($2500-$500). The interest ost of $20000 is $200 ($2000 * 0.10). Therefore, the cost of premium checking is less by $16.

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The question did not specify if the $500 is included in the $2500 or if it will be in addition to $2500, or am I just overthinking things?

[fsugirl2005]

REG - 78
FAR - 79
AUD - 76
BEC - 75

I have been on this journey off and on for over 10 years. I think it's about time that I wrap this up.

AUD - 10/21/16 (75----07/2010 expired)
FAR - 10/28/16
BEC - 11/2016
REG - 01/2017

Using Gleim CPA Review, Ninja Audio, Ninja Book

[fsugirl2005]

REG - 78
FAR - 79
AUD - 76
BEC - 75

I have been on this journey off and on for over 10 years. I think it's about time that I wrap this up.

AUD - 10/21/16 (75----07/2010 expired)
FAR - 10/28/16
BEC - 11/2016
REG - 01/2017

Using Gleim CPA Review, Ninja Audio, Ninja Book

[acamp]

I think you're overthinking, read the scenario as its written as if its on a banking brochure, “require $2500 minimum balance” sounds to me like $2000 more than plan

Self proclaimed: Highest ratio of Replies to Others v. Posts Created on A71

California CPA - Big4 Aud Manager Alum - Private Accounting at Startups

FAR, REG and BEC with Ninja Notes + WTB Only

Ninja + Wiley Test Bank: [FAR - 81] [REG - 76] [BEC - 88] [AUD - 73](doh!)

Becker Videos: [AUD - 82]

California CPA

[acamp]

I think you're overthinking, read the scenario as its written as if its on a banking brochure, “require $2500 minimum balance” sounds to me like $2000 more than plan

Self proclaimed: Highest ratio of Replies to Others v. Posts Created on A71

California CPA - Big4 Aud Manager Alum - Private Accounting at Startups

FAR, REG and BEC with Ninja Notes + WTB Only

Ninja + Wiley Test Bank: [FAR - 81] [REG - 76] [BEC - 88] [AUD - 73](doh!)

Becker Videos: [AUD - 82]

California CPA

[Author]

Replies