Respuesta :
Answer:
Option c. 18 withdrawals is correct
Step-by-step explanation:
Gareth has to invest = $2,000
His local bank gives 2.2% annual interest and gives him the ability to make ATM withdrawals without any charges.
In an online savings gives 4.85% annual interest, but charges $3 every time he makes an ATM withdrawal.
Let us find the amount of interest earned from the local bank.
The amount of interest earned from Local Bank = 2.2% of 2000
= [tex]\frac{22}{100}[/tex] × 2000
= 0.022 × 2000 = $44
The amount of interest earned from online savings = 4.85% of 2000
= [tex]\frac{4.85}{100}[/tex] × 2000
= 0.0485 × 2000 = $97
As it is given that savings account has no ATM withdrawal charges but online savings account charge $3.00 per withdrawal.
so we need to make x withdrawals from both accounts such that:
97 - 3x = 44
Let us solve for x.
Upon subtracting 97 from both sides of or equation we will get,
97 - 97 - 3x = 44 - 97
3x = -53
[tex]\frac{3x}{-3}=\frac{-53}{-3}[/tex]
x = 17.666 rounded to 18
Therefore, Gareth must make 18 ATM withdrawals every year for the local savings account to be a better deal than the online savings account.
