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Banking course question 4. Diamond Pit Savings Association finds that it can attract the following amounts of deposits if it offers new depositors and those

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4. Diamond Pit Savings Association finds that it can attract the following amounts of deposits if it offers new depositors and those rolling over their maturing CDs the inter- est rates indicated below: Expected Volume of New Deposits $10 million 15 million 20 million 26 million 28 million Rate of Interest Offered Depositors 5.00% 5.25 5.50 5.75 6.00 Management anticipates being able to invest any new deposits raised in loans yielding 7 percent. How far should this thrift institution go in raising its deposit interest rate in order to maximize total profits (excluding interest costs)

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