(MATCH A, B,C TO 17,18,19) a) Average daily balance method

b) Unpaid balance method

c) Previous balance method

17. Finance charge is calculated on the existing balance on the first day after the billing cycle ends.
Credits and payments are not accounted for.

18. Finance charge is calculated on the existing balance on the first dayafter the billing cycle ends.
Credits and payments are accounted for and reduce the balance used to calculate the finance
charge.

19. Finance charge is calculated on the number of days the balance is outstanding. The balance
used for the calculation will change based on when payments and credits are received.

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.