A financial institution can borrow $100 million for 2 years at 3%. It plans to invest this money in a 1-year security with an interest rate of 4.8% per year. Calculate net interest income for the first year.

If interest rates stay the same in the second, calculate cumulative net interest income.

Calculate the breakeven interest rate for the second year. That is, what earning interest rate in the second year will cause cumulative net interest income to equal zero?