Hammerhead is a shrewd licensed moneylender and he owns two separate companies to give the illusion of competition to the general public and consumers. Hammerhead went ahead and set up two different companies called McShark and Shark King.

• McShark is offering a flat 2.5% rate on all loan amounts with a special condition.
• Shark King is offering a flat 2.6% rate on all loan amounts.

Being more expensive, Shark King should ideally funnel prospective customers to McShark since it costs 0.1% more to get a loan from Shark King. Hammerhead is a businessman after all and a very good one at that. In the fine print of McShark’s contract, it is stated that the first $20,000 loan amount would always attract a 3.5% interest (additional 1%) which is effectively a two-tier structure. Poor Boy and Smart Girl are getting married and buying a house. Assuming that Poor Boy wants to get a huge loan of $200,000 to buy an apartment...