Question

1. There are five members (Sara, Anna, Adam, Mohammed and Maryam) in a family. Each of them has some amount of money that would like to invest in different projects and each member can invest up to 3000 $. Family members are able to borrow or lend money among themselves at an interest rate.                                                                                                                                                                                       The rates of return on the family’s members investment project are given in the below table:

Family Members	Amount	Rate of Return
Sara	2500       $	7%
Anna	1250       $	6%
Adam	1550       $	9%
Mohammed	1450       $	11%
Maryam	1750       $	5%

1. Suppose that the rate of Interest (r) in the market is 8%, based on the investment projects opportunities that each family member has (as mentioned in the above table), among the family members who prefer to borrow more money and Invest in his/her project and who would like to lend his/her money to other members. Provide amount that each member prefers to borrow or lend. Determine the quantity of loanable funds demanded and supplied at r= 8%. Explain your answer clearly.

[2 Points]

Family Members	Lend	Borrow	How much
Sara	1,000$		1,500$
Anna	1,250$
Adam		1,450$	3,000$
Mohammed		1,550$	3,000$
Maryam	1,750$

              Explain your answer here:

2. At what interest rate would the loanable funds be in equilibrium among all family members? Draw a graph and show your answer also on the graph. (Clearly Explain your answer)

Answer 1