What will be the decline in the net interest income

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Question - Consider the following balance sheet for Watchover Savings Inc. (in millions):

Assets

Liabilities and Equity

Floating-rate mortgages (8%)

$100

NOW deposits (4%)

$125

30-year fixed-rate loans (7%)

$150

5-year time deposits (5%)

$75



Equity

$50

Total

$250

Total

$250

Required - What will be the decline in the net interest income at year-end if interest rates rise by 1 percent?

Reference no: EM133117983

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