Find the highest interest rate, Microeconomics

Assignment Help:

Find the highest interest rate:

There are 2 entrepreneurs, Sally and Paul.  The return to their projects are given by:

145_Find the highest interest rate.png

To finance the project, each entrepreneur needs to borrow from a bank an initial capital of 100.  The loan contract stipulates that if the project return is high, then the firms pays principal plus interests, and if the project return is low, then the bank seizes whatever value that the firm has left over.  Find the highest interest rate at which Sally is willing to borrow, the highest interest rate at which Paul is willing to borrow, and the bank's expected net profit if the interest rate is 10% and 18%, respectively.


Related Discussions:- Find the highest interest rate

Supply, plese give me supply assigement

plese give me supply assigement

Perform a threshold analysis, You are a member of a problem solving group t...

You are a member of a problem solving group that is concerned with incidents involving losses with their information system (IS). Let us assume that IS loss events can be grouped i

The production possibilities frontier (ppf), The Production Possibilities F...

The Production Possibilities Frontier (PPF) The PPF curve exhibits the probable combinations of goods and services accessible to an economy, given that all productive resources

Create a multi-dimensional arrays, Create a Document that displays informat...

Create a Document that displays information about cars. First, create a select with an id="make". It will not have any makes in the options until the page finishing loading. When t

Privatisation of the economy:, Privatisation of the Economy: Privatisa...

Privatisation of the Economy: Privatisation has to be viewed in two ways: In a narrow sense, it implies the induction of private ownership in a public sector undertaking. In a

Special drawing rights, Special Drawing Rights: SDRs are entitlement g...

Special Drawing Rights: SDRs are entitlement granted to member countries enabling them to draw from the IMF apart from their quota. It is similar to a bank granting a credit l

Opportunity cost, what are the concept of opportunity cost

what are the concept of opportunity cost

Feudalism, A type of economy (like in Europe in the Middle Ages) which is p...

A type of economy (like in Europe in the Middle Ages) which is primarily agricultural however productive enough to support a class of merchants andartisans. Feudal societies are co

Price elasticity of supply, Price elasticity of supply – Computes the p...

Price elasticity of supply – Computes the percentage change in quantity supplied resulting from a 1 percent variation in price. – The elasticity is usually positive as price

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd