Consider the following balance sheet for WatchoverU Savings Inc. ($ in millions):

Assets				Liabilities
Floating-rate mortgages (currently 13% annually)	$	59		NOW accounts (currently 9% annually)	$	79
30-year fixed-rate loans (currently 10% annually)		59		Time deposits (currently 9% annually)		29
				Equity		10
Total	$	118			$	118

What will be the net interest income at year-end if interest rates rise by 4 percent? Express your answer in millions of dollars (e.g. 3,260,000=3.26)

Answer rating: 100% (QA)

To calculate the net interest income at yearend with a 4 percent increase in interest rates well fir... View the full answer