The accompanying table shows Francesca's estimated annual benefits of holding different amounts of money. Average money holdings $ 700 800 900 Total benefit $ 50 59 66 71 74 1,000 1,100 How much money will Francesca hold if the nominal interest rate is 6 percent? (Assume she wants her money holdings to be in multiples of $100.)

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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### Francesca's Estimated Annual Benefits of Money Holdings

The table below displays Francesca’s estimated annual benefits from holding different amounts of money:

| Average Money Holdings | Total Benefit |
|------------------------|---------------|
| $700                   | $50           |
| $800                   | $59           |
| $900                   | $66           |
| $1,000                 | $71           |
| $1,100                 | $74           |

**Question:** How much money will Francesca hold if the nominal interest rate is 6 percent? Assume she wants her money holdings to be in multiples of $100.

#### Multiple Choice Options

- $1,000
- $900
- $800
- $700

This information helps determine the optimal level of money holdings based on interest rates and the benefits received.
Transcribed Image Text:### Francesca's Estimated Annual Benefits of Money Holdings The table below displays Francesca’s estimated annual benefits from holding different amounts of money: | Average Money Holdings | Total Benefit | |------------------------|---------------| | $700 | $50 | | $800 | $59 | | $900 | $66 | | $1,000 | $71 | | $1,100 | $74 | **Question:** How much money will Francesca hold if the nominal interest rate is 6 percent? Assume she wants her money holdings to be in multiples of $100. #### Multiple Choice Options - $1,000 - $900 - $800 - $700 This information helps determine the optimal level of money holdings based on interest rates and the benefits received.
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