Gareth has $2,000 to invest. Putting the money in a savings account at his local bank will earn him 2.2% annual interest and gives him the ability to make ATM withdrawals from that bank's ATMs. Putting the money in an online savings account will earn him 4.85% annual interest, but he will be charged $3 every time he makes an ATM withdrawal. Assuming that Gareth's ATM withdrawals do not affect the amount of interest he earns, roughly how many ATM withdrawals must Gareth make every year for the local savings account to be a better deal than the online savings account?

a.

8

b.

14

c.

18

d.

25

Question

Mathematics

Chaz

17 April, 18:07

Gareth has $2,000 to invest. Putting the money in a savings account at his local bank will earn him 2.2% annual interest and gives him the ability to make ATM withdrawals from that bank's ATMs. Putting the money in an online savings account will earn him 4.85% annual interest, but he will be charged $3 every time he makes an ATM withdrawal. Assuming that Gareth's ATM withdrawals do not affect the amount of interest he earns, roughly how many ATM withdrawals must Gareth make every year for the local savings account to be a better deal than the online savings account?

a.

8

b.

14

c.

18

d.

25

+1

Answers (1)

Know the Answer?

Kellen Carr · Answer 1

What a strange question. How could withdrawals fail to change the interest earned?! Anyway ... How much does $2000 earn in a year at 2.2%? How much does $2000 earn in a year at 4.85%? What the difference in interest credits? How many $3 ATM transactions does it take to eat that up?