Answer:
The net interest income in two years would $1,500,000 and $375,000
Explanation:
In order to calculate the net interest income in two years, we have to calcuate the following:
First we have to Calculate the interest income:
Year 1 = $ 75,000,000*12% = 9,000,000
Year 2 = $75,000,000*12% = 9,000,000
Also, we have to Calculate the interest expense
Year 1 = ·$75,000,000 * 10% = $7,500,000
Year 2 = $75,000,000 * (10%+1.5%) = $8,625,000
Finally we can calculate the Net Interest Income which is = Interest income - Interest expense
Hence interest income of Year 1 = $9,000,000 - $7,500,000 = $1,500,000
interest income of Year 2 = $9,000,000 - $8,625,000 = $375,000
