Here is Simple Banks balance sheet (with associated interest rates):

Assets

$800 million Business Loans, 7.5%

$200 million Corporate Bonds, 4.25%

$25 million Reserves, Fed pays 0.5%

$10 million Real Assets

Liabilities

$550 million Demand Deposits

$360 million Time Deposits, 2.5%

$25 million Preferred Shares, 3.3%

$100 million Common Shares

Q. Calculate the banks Net Interest Margin, nothing that dividends on preferred shares are not included (because they are not interest):