Chapter 12
Problem 04
Input Area:
Expected
Volume of New
Deposits
Rate Offered
on New Funds
1
10,000,000 2.00%
2
15,000,000 2.25%
3
20,000,000 2.50%
4
26,000,000 2.75%
5
28,000,000 3.00%
Expected yield on new loans 5.50%
Output Area:
Total Interest
Cost
Marginal Cost
of New Deposit
Money
Marginal Cost
Rate
Exp. Diff. In
Marg. Rev
and Cost
Total Profits
Earned
1
200,000 200,000 2.00% 3.50% 350,000
2
337,500 137,500 2.75% 2.75% 487,500
3
500,000 162,500 3.25% 2.25% 600,000
4
715,000 215,000 3.58% 1.92% 715,000
5840,000 125,000 6.25% -0.75% 700,000
Chapter 12
Problem 05
Input Area:
Expected Volume
of New Deposits
Rate Offered on
New Funds
1100,000,000 2.00%
2200,000,000 2.25%
3300,000,000 2.50%
4400,000,000 2.75%
5500,000,000 3.00%
6600,000,000 3.25%
Marginal Revenue Rate 4.25%
Output Area:
Total Interest Cost
Marginal Cost of
New Deposit
Money
Marginal Cost
Rate
Exp. Diff. In
Marg. Rev
and Cost
Total Profits
Earned
4.25
12,000,000 2,000,000 2.00% 2.25% 2,250,000
24,500,000 2,500,000 2.50% 1.75% 4,000,000
37,500,000 3,000,000 3.00% 1.25% 5,250,000
411,000,000 3,500,000 3.50% 0.75% 6,000,000
515,000,000 4,000,000 4.00% 0.25% 6,250,000
619,500,000 4,500,000 4.50% -0.25% 6,000,000
Chapter 12
Problem 06
Input Area:
Minimum balance required $1,000.00
Servicing costs (labor and computer) $3.25
Overhead expenses $1.25
Profit margin $0.50
Savings per $100 above min balance req. 5.00%
Customer’s average balance $1,200.00
Output Area:
Monthly fee (cost plus profit approach) $5.00
Appropriate fee for above customer $4.68
Chapter 12
Problem 07
Input Area:
Month
Days per
month
Average Balance
January 31 450.00
February 28 350.00
March 31 300.00
April 30 550.00
May 31 225.00
June 30 4.00
July 31 450.00
August 31 425.00
September 30 550.00
October 31 600.00
November 30 625.00
December 31 500.00
Annual Interest Income 10.75
Output Area:
Month Aver Bal * Days
January 13,950.00
February 9,800.00
March 9,300.00
April 16,500.00
May 6,975.00
June 120.00
July 13,950.00
August 13,175.00
September 16,500.00
October 18,600.00
November 18,750.00
December 15,500.00
Average balance (yearly) 419.51
Annual Percentage Yield 2.56%
Chapter 12
Problem 08
Input Area:
Balance Days for balance
12,500 90
2
3,000 180
3
4,500 95
Annual Percentage Yield 2.75%
Output Area:
Aver Bal * Days
1225,000
2540,000
3427,500
Average balance (yearly) 3,267.12
Interest Income (Earnings) 89.85