1. What is not a cost of keeping money in a checking account? A) Transaction fee...

1. What is not a cost of keeping money in a checking account?

A) Transaction fee for ATM transaction

B) Fees for various services like stop payments

C) Minimum balance requirement for free checking

D) FDIC insurance

2. You have estimated that you need $6,500 in liquid assets for an emergency fund. You currently have only $1,000, which is invested in a savings account earning 3percent nominal interest, compounded monthly. Your current budget leaves $290per month to apply to this goal. If you plan to add this money to your savings at the end of every month, how much will you have after one year?

Solutions

Expert Solution

1. Option D. FDIC Insurance is an insurance services which provides insurance to the depositors in US depository institutions. Thus the same is not fee to keeping money in checking account

2. Future value of $1000 after 1 years = deposit * (1 + Interest per month)^12

Future value of $1000 after 1 years = 1000 * 1.0025^12

Future value of $1000 after 1 years = $1030.42

Future value of monthly deposit of $290 after a year = $3528.25

Thus total money after a year = $4558.67 (1030.42 + 3528.25)

*Please comment if you face any difficulty and please don't forget to provide positive rating*

jeff jeffy answered 1 year ago

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