Question
Consider a bank with $35,000,000 in gross residential mortgage loans, and its historic losses have been 0.91% on its residential mortgage loans. If the bank
Consider a bank with $35,000,000 in gross residential mortgage loans, and its historic losses have been 0.91% on its residential mortgage loans. If the bank wants to net 5% return on its residential mortgages, what rate should it charge to compensate for its losses? Show your work.
- How much will the bank lose on residential mortgages?
- How many residential mortgage loans will be paid in full?
- How much interest income will the bank make on the residential mortgage loans that are paid in full?
- How many dollars will the bank have received at yearend from its residential mortgage loans?
- What percentage of $35,000,000 is this amount of yearend total funds?
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QFinance The Ultimate Resource
Authors: Various Authors
1st Edition
1849300003, 978-1849300001
