The answer to this question c) is 118,055 increase or 9.3%. Can you help me with why this is the case?

1.) A bank has the following balance sheet: Assets Rate sensitive $ 1,050,000 at 8.5% Fixed rate $ 2,100,000 at 10.0% Non earning $ 300,000 Total $ 3,450,000 Liab & Equity Rate sensitive $ 1,270,000 at 7.2% Fixed rate $ 1,950,000 at 8.1% Non paying $ 230,000 Total $ 3,450,000 Suppose interest rates fall such that the average yield as rate sensitive assets decreases by 20 basis points and the average yield on rate sensitive liabilities decreases by 10 basis points. a.) Calculate the Bank's CGAP and gap ratio. b.) Assuming the bank does not change the composition of its balance sheet, calculate the resulting changes in the bank's interest income, interest expenses and net interest income. c.) If the rate sensitive assets increase by 10%, determine the corresponding change in rate sensitive liabilities to maintain the net interest income as calculated in b.). 1.) A bank has the following balance sheet: Assets Rate sensitive $ 1,050,000 at 8.5% Fixed rate $ 2,100,000 at 10.0% Non earning $ 300,000 Total $ 3,450,000 Liab & Equity Rate sensitive $ 1,270,000 at 7.2% Fixed rate $ 1,950,000 at 8.1% Non paying $ 230,000 Total $ 3,450,000 Suppose interest rates fall such that the average yield as rate sensitive assets decreases by 20 basis points and the average yield on rate sensitive liabilities decreases by 10 basis points. a.) Calculate the Bank's CGAP and gap ratio. b.) Assuming the bank does not change the composition of its balance sheet, calculate the resulting changes in the bank's interest income, interest expenses and net interest income. c.) If the rate sensitive assets increase by 10%, determine the corresponding change in rate sensitive liabilities to maintain the net interest income as calculated in b.)