We shall first compute the profitability on the term deposits of $300 million collected from the public. Straight accounting leads to:
To be able to compute the profitability of term deposits, we need to specify the relevant revenue that should be attributed to the term deposits.
Consider the following question: e-Bank has collected in total $300 million in term deposits. What would the bank do if it collected $330 million instead of $300 million, or if it only collected $270 million instead of $300 million?
Therefore, the ...