Ninth national bank holds $150,000,000 in checkable deposits and $12,000,000 in total reserves. with a required reserve ratio of

Question

Harman [31]

3 years ago

6

Ninth national bank holds $150,000,000 in checkable deposits and $12,000,000 in total reserves. with a required reserve ratio of

8 percent, how much in excess reserves is ninth national holding?

Business

1 answer:

hram777 [196] · Answer 1 · 2022-07-13T02:05:45+03:00

We are asked to solve for the excess reserves. There are given values such as:
Checkable deposits = $ 150,000,000
Total reserves = $12,000,000
Required reserve ratio = 8%

Solving for reserve amount, we have:
Reserve amount = 0.08 * $150,000,000 = $ 12,000,000

Solving for the excess:
Excess reserves = $ 12,000,000 - $12,000,000 = $0

The answer is $0.