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Net Interest Margin Formula

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Net Interest Margin measures the difference between the interest income earned from interest-earning assets. Check FAQs

NIM = \frac{NII}{AIEA}

NIM - Net Interest Margin?NII - Net Interest Income?AIEA - Average Interest Earning Assets?

Net Interest Margin Example

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Here is how the Net Interest Margin equation looks like with Values.

Here is how the Net Interest Margin equation looks like with Units.

Here is how the Net Interest Margin equation looks like.

3.25 = \frac{1300}{400}

3.25 = \frac{1300}{400}

3.25 = \frac{1300}{400}

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Net Interest Margin Solution

Follow our step by step solution on how to calculate Net Interest Margin?

FIRST Step Consider the formula

NIM = \frac{NII}{AIEA}

Next Step Substitute values of Variables

∴

NIM = \frac{1300}{400}

Next Step Prepare to Evaluate

∴

NIM = \frac{1300}{400}

LAST Step Evaluate

∴

NIM = 3.25

Net Interest Margin Formula Elements

Variables

Net Interest Margin

Net Interest Margin measures the difference between the interest income earned from interest-earning assets.

Symbol: NIM

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Net Interest Margin

Net Interest Income

Net Interest Income represents the difference between the interest income earned from interest-earning assets.

Symbol: NII

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Net Interest Income

Average Interest Earning Assets

Average Interest Earning Assets is a financial metric used by banks and financial institutions to calculate the average balance of assets that generate interest income over a specific period.

Symbol: AIEA

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Average Interest Earning Assets

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How to Evaluate Net Interest Margin?

Net Interest Margin evaluator uses Net Interest Margin = Net Interest Income/Average Interest Earning Assets to evaluate the Net Interest Margin, The Net Interest Margin formula is defined as a key financial metric used primarily in the banking and financial services industry to evaluate the profitability of lending and investment activities. Net Interest Margin is denoted by NIM symbol.

How to evaluate Net Interest Margin using this online evaluator? To use this online evaluator for Net Interest Margin, enter Net Interest Income (NII) & Average Interest Earning Assets (AIEA) and hit the calculate button.

FAQs on Net Interest Margin

What is the formula to find Net Interest Margin?

The formula of Net Interest Margin is expressed as Net Interest Margin = Net Interest Income/Average Interest Earning Assets. Here is an example- 3.241895 = 1300/400.

How to calculate Net Interest Margin?

With Net Interest Income (NII) & Average Interest Earning Assets (AIEA) we can find Net Interest Margin using the formula - Net Interest Margin = Net Interest Income/Average Interest Earning Assets.

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Net Interest Margin Formula

Net Interest Margin Example

Net Interest Margin Solution

Net Interest Margin Formula Elements

Other formulas in Financial Institutions Management category

How to Evaluate Net Interest Margin?

FAQs on Net Interest Margin

Variable Name