A Bank Expects to Raise $30 Million in New Money

Multiple Choice

A bank expects to raise $30 million in new money if it pays a deposit rate of 7%,$60 million in new money if it pays a deposit rate of 7.5%,$80 million in new money if it pays a deposit rate of 8%,and $100 million in new money if it pays a deposit rate of 8.5%.The bank expects to earn 9% on all money that it receives in new deposits.What is the marginal cost of deposits if the bank raises its deposit rate from 7 to 7.5%?

A) 0.5%
B) 7.5%
C) 8.0%
D) 9.5%
E) 10.5%