Caulfield Bank is currently faced with high demand for additional new loans: $40m in household loans, and $20m in business loans. The bank has decided to finance this new pool of loans using the...

Caulfield Bank is currently faced with high demand for additional new loans: $40m in household loans, and $20m in business loans. The bank has decided to finance this new pool of loans using the following funding mix:

• 
  Household loans to be funded by savings deposits (25%), fixed deposits (65%), and equity (10%);


• 
  Business loans to be funded by fixed deposits (40%), certificates of deposit (45%), and equity (15%).

Calculate the pooled marginal cost of funds (PMC) for thehousehold loan funding mix and the PMC for thebusiness loan funding mix,in percentage terms, given the following information for Caulfield Bank: