Oldhat Financial starts its first day of operations with $12 million in capital.

Question

Oldhat Financial starts its first day of operations with $12 million in capital. A total of $125 million in checkable deposits are received. The bank makes a $30 million commercial loan and another $60 million in mortgages, with the following terms: 200 standard 30-year,fixed-rate mortgages with a nominal annual rate of 5.25%, each for $300,000.Assume that required reserves are 8%.

Complete the bank's balance sheet provided below. (Round your responses to the nearest whole number.)

Assets

Liabilities

Required reserves

$

million

Checkable deposits

$

million

Excess reserves

$

million

Bank capital

$

million

Loans

$

million

Assets

Liabilities

Required reserves

$

million

Checkable deposits

$

million

Excess reserves

$

million

Bank capital

$

million

Loans

$

million

Explanation / Answer

Assets Amount Liabilities Amount Required Reserves 11 Checkable Deposits 125 Excess Reserves 36 Bank Capital 12 Loans 90 Total 137 Total 137

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