Question - Revenue budget
In 2013, Grand Falls Bank (GFB) had $4,197,000 in business loans at an average interest rate of 3.3 percent as well as $3,170,000 in consumer loans with an average rate of 8.5 percent. GFB also has $719,000 invested in government securities that pay interest at an average rate of 2.8 percent.
For 2014, GFB estimates that the volume of business loans will increase to $6,060,000, and the interest rate will rise to 5.1 percent. It projects that consumer loans will be $3,906,000 and have an average interest rate of 12.2 percent. The bank's government security investment will be $1,458,000 and will bear an average interest rate of 5.0 percent. What is GFB's projected revenue for 2014?