A bank currently has the following assets and liabilities on its balance sheet.

Assets Liabilities and Equity

Cash $3,500,000 Checking account deposits $4,500,000

Shortterm loans* 7,500,000 Money market deposits 8,000,000

Money market securities 2,000,000 Short-term savings accounts* 2,500,000

Federal funds sold 500,000 Certificate of deposits (9 mo. term) 1,500,000

Fixed Assets 3,000,000 Equity capital 1,250,000

* Expected to mature within 12 months

1. Calculate the dollar interest-sensitive gap.
2. If interest fall by 0.40 percent, calculate the dollar effect (clearly stating increase or decrease) on the banks net interest income.
3. If the banks total assets are $15,000,000, calculate the interest-sensitive ratio.