Use the following information for questions
Suppose there is one depositor who earns an income of $100 in each period.She spends $50 for consumption and the remainder goes to her savings account.Assume that a bank doesn't do anything with this money except safeguards it.The bank charges $5 for safeguarding fee.
-Suppose the banking industry is competitive.If the bank charges a loan rate of 18%, safeguarding fee of $5, and there are five depositors and two merchants, what would be the deposit interest rate that the bank can offer to the depositors?
A)18.0%
B)15.6%
C)13.5%
D)12.4%
E)-10%

Question

Use the following information for questions 
Suppose there is one depositor who earns an income of $100 in each period.She spends $50 for consumption and the remainder goes to her savings account.Assume that a bank doesn't do anything with this money except safeguards it.The bank charges $5 for safeguarding fee.
-Suppose the banking industry is competitive.If the bank charges a loan rate of 18%, safeguarding fee of $5, and there are five depositors and two merchants, what would be the deposit interest rate that the bank can offer to the depositors?
A)18.0%
B)15.6%
C)13.5%
D)12.4%
E)-10%

Quizplus · Accepted Answer

The Answer of Use the following information for questions 
Suppose there is one depositor who earns an income of $100 in each period.She spends $50 for consumption and the remainder goes to her savings account.Assume that a bank doesn't do anything with this money except safeguards it.The bank charges $5 for safeguarding fee.
-Suppose the banking industry is competitive.If the bank charges a loan rate of 18%, safeguarding fee of $5, and there are five depositors and two merchants, what would be the deposit interest rate that the bank can offer to the depositors?
A)18.0%
B)15.6%
C)13.5%
D)12.4%
E)-10%

Use the Following Information for Questions