Consider the following income statement for WatchoverU Savings Inc. (in millions): Assets Liabilities Floating-rate mortgages (currently 12%...

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Consider the following income statement for WatchoverU SavingsInc. (in millions): Assets Liabilities Floating-rate mortgages(currently 12% annually) $ 63 NOW accounts (currently 8% annually)$ 83 30-year fixed-rate loans (currently 9% annually) 63 Timedeposits (currently 8% annually) 26 Equity 17 Total $ 126 $ 126 a.What is WatchoverU’s expected net interest income at year-end? (Donot round intermediate calculations. Enter your answer in millionsrounded to 2 decimal places. (e.g., 32.16)) Net interest income $4.51 million b. What will be the net interest income at year-end ifinterest rates rise by 1 percent? (Do not round intermediatecalculations. Enter your answer in millions rounded to 2 decimalplaces. (e.g., 32.16))

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3.7 Ratings (690 Votes)

a Watchovers expected net interest income at yearend Interest Income 63 x 12 63 x 9 756 Million 567 Million 1323 Million Interest Expenses 83 x 8 26 x 8 See Answer

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Consider the following income statement for WatchoverU SavingsInc. (in millions): Assets Liabilities Floating-rate mortgages(currently 12% annually) $ 63 NOW accounts (currently 8% annually)$ 83 30-year fixed-rate loans (currently 9% annually) 63 Timedeposits (currently 8% annually) 26 Equity 17 Total $ 126 $ 126 a.What is WatchoverU’s expected net interest income at year-end? (Donot round intermediate calculations. Enter your answer in millionsrounded to 2 decimal places. (e.g., 32.16)) Net interest income $4.51 million b. What will be the net interest income at year-end ifinterest rates rise by 1 percent? (Do not round intermediatecalculations. Enter your answer in millions rounded to 2 decimalplaces. (e.g., 32.16))