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Given amount of funds available at each interest rate level and the investment opportunity yielding 5.75%, which is the optimal level of interest rate to

Given amount of funds available at each interest rate level and the investment opportunity yielding 5.75%, which is the optimal level of interest rate to be offered?

Tranche Expected Volume of New Deposits Rate Offered on New Funds
1 9,999,000 3.0000%
2 17,998,200 3.5000%
3 23,997,600 3.7500%
4 34,996,500 4.2500%
5 54,994,500 5.0000%

Offer 3.00% and net a profit of $143,167

Offer 4.25% and net a profit of $292,470

Offer 3.75% and net a profit of $299,970

offer 5% and net a profit of $299,970

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