Read Joshua’s scenario below and use the provided links to …

Law Questions
Short Answer
Step by Step Solution
Law Questions

Read Joshua’s scenario in the box below. Then, use the links provided to help you calculate his overdraft fees. The Scenario: ● When the day begins, Joshua has $116 in his checking account, and he has overdraft protection ● Before school he buys his cousin a round trip bus fare for $4 using his debit card ● He then uses the card to get gas in his car for $43 ● Once the banks open, a check he gave the school for his senior yearbook clears, and $75 comes out of his account ● Joshua’s Netflix account subscription is automatically debited today, too, so another $10 leaves the account ● After school he heads out with friends and uses his debit card to buy a $3 coffee ● He sends a person-to-person payment of $15 to his friend Bryant for his share of dinner ● Finally, he finishes out the day with some shopping to buy new soccer gear for $35 using his debit card at the store

Short Answer

Joshua starts with $116 in his checking account and spends a total of $185 on various transactions, resulting in a final account balance of -$69. Although he has overdraft protection, this incurs additional fees that he needs to be aware of for effective financial management.

Step-by-Step Solution

Step 1: Understand the Starting Balance

Joshua begins the day with a total of $116 in his checking account. This initial amount is important as it sets the stage for all subsequent transactions he makes throughout the day.

Step 2: Review the Transactions

Joshua conducts multiple financial transactions that reduce his account balance. Here’s a breakdown of his expenses:

  • Bus fare for cousin: $4
  • Gas for car: $43
  • Senior yearbook check: $75
  • Netflix subscription: $10
  • Coffee with friends: $3
  • Dinner payment to Bryant: $15
  • Soccer gear shopping: $35

The total of these expenses sums up to $185, which impacts his account significantly.

Step 3: Calculate the Final Balance and Fees

After completing all of his transactions, Joshua’s account balance drops to $-69, calculated as $116 (starting balance) – $185 (total expenses). Since he has opted for overdraft protection, he can still complete his purchases, but he will incur an overdraft fee based on his bank’s policies, which are unspecified. Thus, understanding these factors is crucial for managing his finances effectively.

Related Concepts

Starting Balance

The initial amount of money in a person’s bank account before any transactions are made.

Transactions

Financial activities or exchanges that affect the account balance, either increasing or decreasing it.

Overdraft Protection

A banking feature that allows account holders to complete transactions even when their account balance goes below zero, usually accompanied by associated fees.

Table Of Contents
  1. Read Joshua’s scenario in the box below. Then, use the links provided to help you calculate his overdraft fees. The Scenario: ● When the day begins, Joshua has $116 in his checking account, and he has overdraft protection ● Before school he buys his cousin a round trip bus fare for $4 using his debit card ● He then uses the card to get gas in his car for $43 ● Once the banks open, a check he gave the school for his senior yearbook clears, and $75 comes out of his account ● Joshua’s Netflix account subscription is automatically debited today, too, so another $10 leaves the account ● After school he heads out with friends and uses his debit card to buy a $3 coffee ● He sends a person-to-person payment of $15 to his friend Bryant for his share of dinner ● Finally, he finishes out the day with some shopping to buy new soccer gear for $35 using his debit card at the store

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