In our first bank return workout scenario we have an investment grade loan which is a triple B minus credit. The loan amount is for 250,000. LIBOR is currently at 2.2%. It's priced at 300 basis points above LIBOR and there's a commitment fee of 1%. So we're going to calculate the return to the bank on this loan. The first thing we need to do is calculate the borrowing rate. A basis point is one 100th of a percent and a percent is one 100th of a single unit. So we need to convert the 300 into percent and then add it to LIBOR. I'm gonna take the 300, divide it by 100, that gets it into single units, and then I'm gonna divide it by 100 again to get it into percents. And that gives me the 3% spread that I need. I now need to add that to the actual LIBOR rate which is 2.2, and I get a borrowing rate of 5.2%. In order to calculate the return, I need to establish that I am giving this money up at the beginning of the loan, which is time zero. And at that point in time is when I will recognize my fee earned of the commitment fee. So that's gonna be equal to the opposite of the loan amount times the commitment fee. I don't earn any interest at time zero because the money has just left. So the economic return at the end of year zero is going to be the sum of the loan being extended net of the commitment fee being earned. Beginning in year one, I start to generate interest, and I generate interest at the borrowing rate, and I'm going to anchor that with F4, times, and I'm gonna calculate my interest on the beginning of the loan, which is 250,000. This is actually interest income earned, so I can actually flip that so that it shows up positive. And not only do I wanna anchor the borrowing rate, but I want to anchor the amount of the loan as well. Because this is a non-amortizing loan and the interest amount therefore is not going to change. I have 13,000 in interest coming in in year one and that's going to stay the same all the way through year four, so I'll copy that across. The interest is going to stay the same in year five. I'm assuming that the interest is a full year of interest just for simplifications. At the end of year five, I'm going to get my money back. So that's going to be the positive return of the loan amount of 250. I don't receive any additional fees in year five. I can just copy my sum formula across, and I now have the economic return in terms of dollars for each year. So in terms of calculating the IRR, I just need to use the Excel formula. This is going to be the yield on the investment. I go ahead and I select the six columns because I'm beginning with year zero, and then I type in a guess, which is I'll use 0.10 and hit Enter, and I get a return of 5.43%.