2. The Ragged Mountain Running Shop (RMRS) sells running shoes and apparel in Charlottesville, VA. The owners of RMRS are considering the possibility of opening new retail locations. After careful market analysis, they estimate the expected returns at five new potential locations. These estimates are listed in the following table, along with the amount RMRS would need to borrow in order to open each location. Qty. of funds demanded $100,000 $100,000 $80,000 $60,000 $200,000 Location Exp. Return Crozen 6% Downtown Charlottesville 4% Harrisonburg Waynesboro 11% 2% West End of Richmond 8% RMRS approaches the Virginia National Bank (VNB) with hopes of borrowing to expand into other locations. Which locations will RMRS open if VNB offers them a loan at an interest rate of 7%? What locations will it open if VNB offers them a loan at an interest a. rate of 5%? b. What is the total amount of loans that RMRS takes at an hterest rate of 7%? At an interest rate of 5%? Use the information in the table on the previous page to complete the demand schedule for RMRS, which is given below. Use the information from the demand schedule to draw RMRS' demand curve for loanable funds. C. Interest rate Quantity Demanded 11% 8% 6% 4% 2%
2. The Ragged Mountain Running Shop (RMRS) sells running shoes and apparel in Charlottesville, VA. The owners of RMRS are considering the possibility of opening new retail locations. After careful market analysis, they estimate the expected returns at five new potential locations. These estimates are listed in the following table, along with the amount RMRS would need to borrow in order to open each location. Qty. of funds demanded $100,000 $100,000 $80,000 $60,000 $200,000 Location Exp. Return Crozen 6% Downtown Charlottesville 4% Harrisonburg Waynesboro 11% 2% West End of Richmond 8% RMRS approaches the Virginia National Bank (VNB) with hopes of borrowing to expand into other locations. Which locations will RMRS open if VNB offers them a loan at an interest rate of 7%? What locations will it open if VNB offers them a loan at an interest a. rate of 5%? b. What is the total amount of loans that RMRS takes at an hterest rate of 7%? At an interest rate of 5%? Use the information in the table on the previous page to complete the demand schedule for RMRS, which is given below. Use the information from the demand schedule to draw RMRS' demand curve for loanable funds. C. Interest rate Quantity Demanded 11% 8% 6% 4% 2%
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![2. The Ragged Mountain Running Shop (RMRS) sells running shoes and apparel in Charlottesville,
VA. The owners of RMRS are considering the possibility of opening new retail locations. After
careful market analysis, they estimate the expected returns at five new potential locations.
These estimates are listed in the following table, along with the amount RMRS would need to
borrow in order to open each location.
Qty. of funds demanded
$100,000
$100,000
Location
Exp. Return
Crozen
Downtown Charlottesville
6%
4%
Harrisonburg
Waynesboro
West End of Richmond
11%
$80,000
$60,000
$200,000
2%
8%
RMRS approaches the Virginia National Bank (VNB) with hopes of borrowing to expand
into other locations. Which locations will RMRS open if VNB offers them a loan at an
interest rate of 7%? What locations will it open if VNB offers them a loan at an interest
a.
rate of 5%?
b. What is the total amount of loans that RMRS takes at an hterest rate of 7%? At an
interest rate of 5%?
c. Use the information in the table on the previous page to complete the demand schedule
for RMRS, which is given below. Use the information from the demand schedule to
draw RMRS' demand curve for loanable funds.
Interest rate
Quantity Demanded
11%
8%
6%
4%
2%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdbd3d9d2-6bda-43e7-8902-b99c81b07ba0%2Fc961529c-f805-43c9-a430-2714aecdcbce%2F0dku7q_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2. The Ragged Mountain Running Shop (RMRS) sells running shoes and apparel in Charlottesville,
VA. The owners of RMRS are considering the possibility of opening new retail locations. After
careful market analysis, they estimate the expected returns at five new potential locations.
These estimates are listed in the following table, along with the amount RMRS would need to
borrow in order to open each location.
Qty. of funds demanded
$100,000
$100,000
Location
Exp. Return
Crozen
Downtown Charlottesville
6%
4%
Harrisonburg
Waynesboro
West End of Richmond
11%
$80,000
$60,000
$200,000
2%
8%
RMRS approaches the Virginia National Bank (VNB) with hopes of borrowing to expand
into other locations. Which locations will RMRS open if VNB offers them a loan at an
interest rate of 7%? What locations will it open if VNB offers them a loan at an interest
a.
rate of 5%?
b. What is the total amount of loans that RMRS takes at an hterest rate of 7%? At an
interest rate of 5%?
c. Use the information in the table on the previous page to complete the demand schedule
for RMRS, which is given below. Use the information from the demand schedule to
draw RMRS' demand curve for loanable funds.
Interest rate
Quantity Demanded
11%
8%
6%
4%
2%
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![ENGR.ECONOMIC ANALYSIS](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9780190931919/9780190931919_smallCoverImage.gif)
![Principles of Economics (12th Edition)](https://www.bartleby.com/isbn_cover_images/9780134078779/9780134078779_smallCoverImage.gif)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
![Engineering Economy (17th Edition)](https://www.bartleby.com/isbn_cover_images/9780134870069/9780134870069_smallCoverImage.gif)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
![Principles of Economics (MindTap Course List)](https://www.bartleby.com/isbn_cover_images/9781305585126/9781305585126_smallCoverImage.gif)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
![Managerial Economics: A Problem Solving Approach](https://www.bartleby.com/isbn_cover_images/9781337106665/9781337106665_smallCoverImage.gif)
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
![Managerial Economics & Business Strategy (Mcgraw-…](https://www.bartleby.com/isbn_cover_images/9781259290619/9781259290619_smallCoverImage.gif)
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education