Mr. Pierpont has wealthof $200,000. He wants to keep at least $80,000 in bonds at all times, and will shift $10,000 into bonds from his checking account for each percentage point that the interest rate on bonds exceeds the interest rate on his checkingaccount. Currently, he keeps $100,000 in bonds, which pay him 7%. What is the current interest rate on checking accounts? A) 5% B) 7%

Mr. Pierpont has wealthof $200,000. He wants to keep at least $80,000 in bonds at all times, and will shift $10,000 into bonds from his checking account for each percentage point that the interest rate on bonds exceeds the interest rate on his checkingaccount. Currently, he keeps $100,000 in bonds, which pay him 7%. What is the current interest rate on checking accounts? A) 5% B) 7%

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Interest, Rent, And Profit

Section: Chapter Questions

Problem 1WNG

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