The bank has determined the information below for one of its customers. This customer wants to borrow $1,000,000 but will maintain an average deposit balance in its account of $200,000. What is the expected net rate of return on this loan?

10.88 percent 12.75 percent 10.25 percent 14.00 percent None of the above

Expected Revenues Interest Revenues Commitment Fee Deposit Service Fees Agency Fees $1,000,000 $15,000 $5,000 S6000 Activty and Record Keeping Costs $16,000 Expected Costs Deposit Interest Cost of Other Funds Raised Loan Processing Costs $30,000 $860,000 $8000 Expected Revenues Interest Revenues Commitment Fee Deposit Service Fees Agency Fees $1,000,000 $15,000 $5,000 S6000 Activty and Record Keeping Costs $16,000 Expected Costs Deposit Interest Cost of Other Funds Raised Loan Processing Costs $30,000 $860,000 $8000