From the information given we have only interest expenses and interest income
Interest Income is received when we give loan to others and it is recorded on Assets side and Interest is paid when we borrow and it is recorded on Liability side.
Based on this we have interest income from Floating rate mortgage and Fixed rate loan. Total income is $ 122 million (61+61). Total interest expenses is $ 110 million (81+29).
Net interest Income = Interest income – interest expenses
= 122-110
= $ 12 million
If interest rate is raised by 3% then only fixed rate loan will not have effect rest all type of loans will be affected. So the interest income of fixed rate loan will not change rest all will increase accordingly
To determine the new value we are doing cross multiplication
Interest Income $ 137.25 million(76.25+61)
Interest expenses $ 151.25 million (111.375+39.875)
So Net Interest Income is $ -14 million or we can say a loss of $ 14 million
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