5. 4 points. JRB has $100K to invest in bonds or in money via an interest-earning checking account. JRB instructs his brokers to invest $50K in bonds and to add $5K more in bonds for every percentage point that the interest rate on bonds exceeds that of his checking account. Show your work on all questions.

(a) 1 point. Write a formula that shows JRB's demand for money as a function of the two interest rates.

(b) 2 points. What is his demand for bonds equation? (1 pt) And the sum of both money and bond demand (1 pt)

(c) 1 point. Suppose everyone invests like JRB, and starts with $80K in bonds and $20K in checking. Checking account now pays no interest. What is the equilibrium interest rate on bonds?