Question
Tadawel Bank expects to raise AED 40 million in new money if it pays a deposit rate of 7%, AED 120 million in new money
Tadawel Bank expects to raise AED 40 million in new money if it pays a deposit rate of 7%, AED 120 million in new money if it pays a deposit rate of 7.5%, AED 200 million in new money if it pays a deposit rate of 8%, and AED 240 in new money if it pays a deposit rate of 8.5%. The bank expects to earn 9.5% on all money that it receives in new deposits.
Required. What deposit rate should Tadawel Bank offer on its deposits, if it uses the marginal cost method of determining deposits rates? Show your calculations in a Table as bellow:
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Financial Accounting
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
7th Edition
978-0470477151, 978-0-470-5562, 470556242, 0-470-55624-2, 9780470556245, 978-0470507018
