The Supply of Savings curve and Investment Demand curves in the economy are described as:

S = S^DOM + NCI

I^D = K^f -(1-d)K⁰, where K⁰ is the period's starting level of capital, K^f is the future capital requirement, and d is the depreciation rate of capital.

The equation for the Investment Demand function above suggests that required Investment has to compensate for depreciated capital as well as increased capital needs going forward.

S^DOM = 160 + 1500r

NCI = 200 + 2500r

K^f = 5000 - 10000r ; K⁰ = 4750 ; d = 20% (use d=0.20 in the equation)