MrPierpont Has Wealth of $200,000

Multiple Choice

Mr.Pierpont has wealth of $200,000.He wants to keep at least $80,000 in bonds at all times,and will shift $10,000 into bonds from his chequing account for each percentage point that the interest rate on bonds exceeds the interest rate on his chequing account.Currently he keeps $100,000 in bonds,which pay him 7%.What is the current interest rate on chequing accounts?

A) 5%
B) 7%
C) 9%
D) 10%