Question
Friendly Financial has $95 million in consumer loans with an average interest rate of 8 percent. The bank also has $63 million in home equity
Friendly Financial has $95 million in consumer loans with an average interest rate of 8 percent. The bank also has $63 million in home equity loans with an average interest rate of 6 percent. Finally, the company owns $17 million in corporate securities with an average rate of 5 percent.
Managers at Friendly Financial estimate that next year its consumer loan portfolio will rise to $169 million and the interest rate will fall to 6 percent. They also estimate that its home equity loans will fall to $50 million with an average interest rate of 6 percent, and its corporate securities portfolio will increase to $18 million with an average rate of 5 percent.
Required:
Estimate Friendly Financials revenues for the coming year. (Enter your answer in thousands of dollars.)
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