What is your total cost of holding cash as function

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Suppose the nominal interest rate is 3 percent, the cost of going to the ATM is $1.50, you have a 12 percent probability of having your cash lost or stolen, and you spend $5 each day. a. What is your total cost of holding cash as a function of the number of days between trips to the ATM? b. How often will you go to the ATM to minimize your costs?

Reference no: EM131124512

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What is your total cost of holding cash as function : Suppose the nominal interest rate is 3 percent, the cost of going to the ATM is $1.50, you have a 12 percent probability of having your cash lost or stolen, and you spend $5 each day. a. What is your total cost of holding cash as a function of the nu..

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