EZ-Credit, Inc., has dollar 130 million in consumer loans with an average intere

Question

EZ-Credit, Inc., has dollar 130 million in consumer loans with an average interest rate of 23 percent. The bank also has dollar 107 million in home equity loans with an average interest rate of 14 percent. Finally, the company owns dollar 11 million in corporate securities with an average rate of 11 percent. EZ-Credit estimates that next year its consumer loan portfolio will rise to dollar 154 million and the interest rate will fall to 21 percent. Its home equity loans will fall to dollar 103 million with an average interest rate of 13 percent, and its corporate securities portfolio will increase to dollar 26 million with an average rate of 12 percent. Required: Estimate EZ-Credit's revenues for the coming year. Interest revenue

Explanation / Answer

                 In Millions Interest Rate Interest Revenue Consumer Loan $154 21% $32.34 Home Equity Loans $103 13% $13.39 Corporate Securities $26 12% $3.12 Interest Revenue $48.85 Interest revenue (in Thousands) $48,850,000

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