Consider the following Income Statement for WatchOverU Savings (in millions)
Assets:
Floating Rate Mortgages (Currently 12% Annually): $66
30 Year Fixed Rate Loans (Currently 9% Annually): $66
Total: $132
Liabilities:
NOW Accounts (Currently 8% Annually): $86
Time Deposits: (Currently 8% Annually): $30
Equity: $16
Total: $132
What is WatchoverU's Expected Net Interest at Year End?
What will be the net interest income at year end if interest rates rise by 3%?