![[i] Calculate the amount of interest income, interest expense, and net interest income generated by the balance sheet structu](http://img.homeworklib.com/questions/125222f0-7925-11ea-bc14-3582c57f2995.png?x-oss-process=image/resize,w_560)
Homework Answers
INTEREST INCOME
Total interest income = RSA interest + FRA interest
= (500*6%) + (350*9%) = 61.50
INTEREST EXPENSE
Total interest expense = RSL Interest + FRL interest
= (600*2%) + (220*4%) = 20.80
NET INTEREST INCOME
= Interest income – interest expense
= 61.50 – 20.80
= 40.70
NET INTEREST MARGIN
= Net interest Income / Avg. Earning Assets
(*take only current year’s values if past yrs. Not given.)
= 40.70 / 850
= 4.79% (approx.)
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