Dan has saved $500. He has to choose between Save-A-Lot Trust or Maple Leaf Savings. Which financial institution charges less per month?

Question

He wants to open a chequing account at Save-A-Lot for $10 a month and 75 cents per cheque or a Maple Leaf Account for $7 a month and $1 per cheque. Which financial institution charges less per month.  

Answer 1

If he writes n checks per month, then total cost per month:

 

in SLT, C1= $0.75*n+$10, and at ML: C2= $1*n+$7

 

If c1=c2 for N checks per month, then $0.75*N+$10=$1*N+$7 > 0.75N-N=7-10 > -0.25N=-3 > N=12

 

2 Answers:

 

If he writes less than 12 checks say 11, c1= $18.25, and c2= $18, > Maple Life is less monthly charge

If he write more than 12 checks, say 13, c1= $19.75, and c2= $20 > Save Trust is less monthly charge