A commercial bank has excess reserves of $5000 and a required reserve ratio of 20 percent. it makes a loan of $6000 to a borrowe
2 answers:
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Solution :
At every stage the formula used will be :
After the junior year, Aunt Mabel's bank balance will be :
= $ 7,322.65
Aunt Mabel's bank balance after sophomore year will be :
7,322.65 + 1000 = $ 8,322.65
= $ 8060.677
After the freshman year, bank balance of Aunt Mable's will be :
8060.677 + 6000 = $ 14,060.677
= $ 14.0606
If Aunt Mabel can predict the interest rate with accuracy, she will have to deposit :
$ 14.0606 + $ 9000 = $ 9,014.06
= $ 8,565.241
Answer:
Effectiveness = 0.75
Explanation:
Availability time for a each day = 10 hr = 600 minutes
Total time for fabricating is given as 90 minutes'
Total time to set up one part 10 minutes
Total parts made in each single day 5
Percentage of defective part 10%
Total production time for a single part = setup time + fabricated time
= 10+ 90 = 100 min
Production time for 5 part =5 × 100 = 500 minutes
Total number of defective parts = 10% of 5 = 0.5 parts
Time to replaced defective = 0.5 × 100 = 50 min
Value added time = 500 - 50 = 450 min
Effectiveness is given as
Effectiveness
Effectiveness
Answer:
The money supply decreases by $4,500.
Explanation:
The amount of deposits is $8,000.
The required reserve ratio is 10%.
The amount of required reserve
= 10% of $8,000
=
= $800
The amount to be loaned out
= Total deposit - Required reserves
= $8,000 - $800
= $7,200
The money supply is equal to money multiplier times the monetary base.
Money supply
=
=
= $72,000
So, the money supply before withdrawal is $72,000.
After withdrawal of $500, the deposits is
= $8,000 - $500
= $7,500
The amount of required reserve
= 10% of $7,500
=
= $750
The amount to be loaned out
= Total deposit - Required reserves
= $7,500 - $750
= $6,750
Money supply
=
=
= $67,500
So, the money supply after withdrawal is $67,500.
The decrease in money supply
= $75,000 - $67,500
= $4,500