(1). If a bank invested $59 million in a two-year asset paying 11 percent interest per year and simultaneously issued a $59 million one-year liability paying 8 percent interest per year, what would be the impact on the banks net interest income if, at the end of the first year, all interest rates increased by 2 percentage point? (Input the amount as a positive value. Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. (e.g., 32.16))

Net interest income will by $ million.

(2). Countrybank offers one-year loans with a stated rate of 12 percent but requires a compensating balance of 7 percent. What is the true cost of this loan to the borrower? (Round your answer to 2 decimal places. (e.g., 32.16))

True cost %