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Consider the following income statement for WatchoverU Savings Inc. (in millions): Assets Liabilities Floating-rate mortgages (currently 14% annually) $ 68 NOW accounts (currently 10% annually)
Consider the following income statement for WatchoverU Savings Inc. (in millions): |
Assets | Liabilities | ||||
Floating-rate mortgages (currently 14% annually) | $ | 68 | NOW accounts (currently 10% annually) | $ | 88 |
30-year fixed-rate loans (currently 11% annually) | 68 | Time deposits (currently 10% annually) | 38 | ||
Equity | 10 | ||||
Total | $ | 136 | $ | 136 | |
a. | What is WatchoverUs expected net interest income at year-end? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. (e.g., 32.16)) |
Net interest income | $ million |
b. | What will be the net interest income at year-end if interest rates rise by 3 percent? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. (e.g., 32.16)) |
Net interest income | $ million |
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