Parsons Bank reported $3 million in interest revenues and $1 million in interest expenses. Parsons has $20 million in assets and $8 million in liabilities. Parsons net interest margin is ____ percent.

Question

Quizplus · Accepted Answer

Net interest margin is calculated as (Interest Revenues - Interest Expenses) / Average Earning Assets. Here, it is ($3 million - $1 million) / $20 million = $2 million / $20 million = 0.10 or 10%.

Parsons Bank Reported $3 Million in Interest Revenues and $1