A bank expects to raise $20 million in new money if it pays a deposit rate of 7%, $60 million in new money if it pays a deposit rate of 7.5%, $80 million in new money if it pays a deposit rate of 8%, and $100 in new money if it pays a deposit rate of 0.5%. The bank expects to earn 10% on all money that it receives in new deposits. What deposit rate should the bank offer on its deposits, if it uses the marginal cost method of determining deposits rates?

A.

7%

B.

7.5%

C.

8%

D.

8.5%

E.	None of the options is correct