Sun Bank of Byron Bay purchased a 16 million euro one-year loan that pays 12 per cent interest annually. The spot rate for euro is 1.60/$1. Sun Bank has funded this loan by accepting a UK pound-(GBP) denominated deposit for the equivalent amount and maturity at an annual rate of 10 per cent. The current spot rate of the UK pound is $1.60/1. (i) What is the net interest income earned in dollars on this one-year transaction if the spot rates at the end of the year are 1.70/$1 and $1.85/1? (6 marks) (ii) What should be the GBP to AUD spot rate in order for the bank to earn a net interest margin of 4 per cent? (5 marks)