Problem 22 - Algebra 2 and Trigonometry

Question

Mrs. Menendez uses computer software to record her checking account balance. Each time that she makes an entry, the amount that she enters is added to her balance. After writing the \(\$ 75\) check, Mrs. Menendez realized that she would be overdrawn when the check was paid by the bank so she transferred \(\$ 100\) from her savings account to her checking account. How should the \(\$ 100\) be entered in her computer program?

Step-by-Step Solution

Answer

Mrs. Menendez should enter $100 as a positive amount in her software.

Step 1: Understand the Scenario

Mrs. Menendez wrote a check for $75, and after realizing that this transaction will overdraw her account, she decides to transfer $100 from her savings to checking account. She uses software to track her checking account balance.

Step 2: Recognize the Entry Approach

The entry system described is such that any amount added to the balance is entered as a positive number. So, when money is deposited into the checking account, it should be entered as a positive value.

Step 3: Apply the Solution

The $100 transfer from savings to checking increases the checking account balance. Therefore, Mrs. Menendez should enter $100 as a positive amount.

Key Concepts

Checking Account

A checking account is a type of bank account that allows frequent access to funds. This is convenient for everyday transactions such as shopping, paying bills, or writing checks. Checking accounts usually have low or sometimes no interest rates, as they are mainly used for quick and regular withdrawals and deposits.
In the case of Mrs. Menendez, her checking account is like her primary wallet. Each transaction, whether it's a deposit or a payment made by check, affects the account balance.
When Mrs. Menendez records a check withdrawal of $75 in her checking account, it reduces her balance. This is typical as checks represent amounts payable to others. In contrast, depositing $100 increases her checking account balance, which is reflected as a positive entry in her software.

Savings Account

Savings accounts are designed to save money and earn interest over time. They generally impose limits on the number of withdrawals per month, fostering savings discipline. Usually, these accounts grant higher interest rates since they're not meant for regular, frequent transactions compared to checking accounts.
Mrs. Menendez keeps her extra funds in her savings account. When she realized her checking account might become overdrawn, she transferred money from her savings. In banking terms, this transfer is crucial when keeping accounts balanced. The savings account's purpose is to have funds available for such unexpected needs without requiring regular withdrawals.

Positive and Negative Numbers

Handling bank transactions involves using positive and negative numbers to reflect account activity. Understanding this can simplify managing finances effectively.

• **Positive numbers:** When money is deposited into an account, it's represented as a positive number. This increases the account's balance. For example, Mrs. Menendez recorded the $100 transfer to her checking as a positive $100.
• **Negative numbers:** When money is taken out from an account, it's entered as a negative number. Examples include the $75 check Mrs. Menendez wrote, which decreased her checking balance.

Using positive and negative numbers helps in accurately maintaining financial records, ensuring the client knows exactly how much money is available at any given time. It's essential to practice these entries correctly, as they form the basics of managing accounts.