BANKING IN CLASS EXAMPLE B Table 2: SE Bank Balance Sheet SE BANK STATEMENT Asse
ID: 2451460 • Letter: B
Question
BANKING IN CLASS EXAMPLE B
Table 2: SE Bank Balance Sheet
SE BANK STATEMENT
Assets
Liabilities and Net Worth
Required Reserves
$40, 000
Checkable (Demand) Deposits
$200,000
Excess Reserves
$ 0
Loans
$ ?
B1. The required reserve ratio for SE Bank is
B2. The total amount of loans outstanding at SE Bank is
B3. Joe Tillman received his $2,000 monthly paycheck and deposits it in SE. Bank. The bank is now able to grant new loans in the amount of
SE BANK STATEMENT
Assets
Liabilities and Net Worth
Required Reserves
$40, 000
Checkable (Demand) Deposits
$200,000
Excess Reserves
$ 0
Loans
$ ?
Explanation / Answer
reserve ratio is=
40000 :200000
1:5
outstanding loan is=200000-40000=$160000 so loan ratio is 1600000:200000=4:5=80%
b3 joe tillman deposit $2000 per month i.e $12000 per year now bank is entitled to pay him 80% of deposit as loan based on previous method. that means 12000*80%=$9600
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