Suppose First National Bank holds $100 million in assets with an average duration of 3 years, and it holds $90 million in lia
1 answer:
Answer:
% change decrease is = 1.2 %
Explanation:
given data
assets = $100 million
average duration = 3 years
liabilities = $90 million
average duration = 3 years
interest rates= 4% increase
to find out
percentage decrease in First National Bank's net worth relative to the total original asset value
solution
change in assets value is
change in assets value = $100 million × 4% × 3 year = $1200 million
change in liability value is
change in assets value = $90 million × 4% × 3 year = $1080 million
change in net worth = $1200 - $1080 = $120 million
so % change is =
% change decrease is = 1.2 %
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Answer:
And if we convert this into % we got
See explanation below.
Explanation:
We assume that we have compounding interest.
For this case we can use the future value formula given by:
Where:
FV represent the future value desired = 1000000
PV= represent the present value = 50000
i = the interest rate that we desire to find in fraction
n = number of times that the interest rate is compounding in 1 year, since the rate is annual then n=1
t = represent the number of years= 50 years
So then we have everything in order to replace and we got:
Now we can solve for the interest rate i like this:
And if we convert this into % we got
Answer:
Explanation:
Before showing how short term debt should be presented before doing this we have to classify the items in each head
Like - In current liabilities, notes payable is recorded at $11,500
And, in the long term liabilities, the proceed after brokerage fees for $1,147,500 should be recorded.
The total amount would remain the same i.e $1,159,000
Kindly find the attachment below:
