Imagine you are a bank manager. Currently, your bank holds $4 million in deposits at a...

Imagine you are a bank manager. Currently, your bank holds $4 million in deposits at a 4% interest rate. However, you need to increase the total deposits to $6 million. The interest rate elasticity of savings is 1.20. What interest rate should you offer to depositors to obtain the required amount, all other things being equal? Use the midpoint method and round to two decimal places throughout your calculations. Enter your answer in the box below.

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jeff jeffy answered 2 years ago

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