Gus has a checking account balance of $75. His bank will fund the a debit card purchase that creates a negative balance up to a limit of $200, but charges a $35 fee per transaction for any purchase made in overdraft. Gus made a purchase of $100 yesterday, and another purchase of $27 today. He used a debit card for each purchase. Then, he deposited a check for $25. What is Gus' current account balance?
I got -$62?
75 - 100 -27 - 2(35) + 25 = -97
Balance before purchase = $75
balance after $100 purchase = -$25
charged $35: so balance = $-60
balance after $27 purchase = -87
charged another 35, so balance is -122
balance after $25 deposit = $-97
Looks like you forgot one of the two 35 s the first time you did it.
Is it -97
Oh thank you so much, I was confused about the fees
You are welcome.
To calculate Gus' current account balance, we need to calculate the cumulative effect of his transactions. Here's how to do it step by step:
1. Start with Gus' initial balance of $75.
2. Gus made a purchase of $100 yesterday, which created an overdraft. Therefore, his balance decreases by $100. Additionally, he incurs an overdraft fee of $35. So, the total reduction in his balance is $100 + $35 = $135.
3. Gus made another purchase of $27 today. Again, this creates an overdraft, so his balance decreases by $27. Additionally, he incurs another overdraft fee of $35. Therefore, the total reduction in his balance is $27 + $35 = $62.
4. Gus then deposits a check for $25. This deposit increases his balance by $25.
To calculate Gus' current account balance, start with his initial balance and then subtract the total reductions and add the total deposits:
Initial balance: $75
Total reductions: $135 + $62 = $197
Total deposits: $25
Therefore, Gus' current account balance is:
$75 - $197 + $25 = -$97 + $25 = -$72.
So, Gus' current account balance is -$72 (negative $72).