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3 years ago

If total deposits in bank A total $15 million and the required-reserve ratio is 10 percent, than excess reserves equal:_______

Business

1 answer:

victus00 [196]3 years ago

7 0

Answer:

$13.5 million

Explanation:

Fractional Banking System- This is banking system where banks are required by the central banking authority to keep a certain percentage of their total deposit as the minimum reserve which they cannot lend out.

The idea behind this requirement is to help manage liquidity risk- a situation where a bank does not have enough cash to meet its deposit customers demand.

Required-reserve ratio: The minimum percentage that banks are required to keep as reserve is known as the required-reserve ratio. In this question, it is given as 10%. Multiply this ratio by the total deposit and you will get the required reserve in dollar amount.

Therefore the required reserve for this bank = 10% ×$15 million= $1.5 million

Excess reserve; Excess reserve is the balance of the total deposit over and above the required reserve. The bank can lend and create loan asset from this balance.

It is calculated as = Total deposit - Required reserve

So we apply this to our question

Excess reserve = $15 million - (10% × $15 million)

= $15 million - $1.5 million

= $13.5 million

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3 years ago

For each activity, select the impact on the accounting equation. After doing all transactions, ensure that the accounting equati

AlladinOne [14]

Answer:

Impact of Transactions on the Accounting Equation:

Transaction Assets = Liabilities + Stockholders' Equity

1. 15,000 = 0 15,000

2. 9,000 = 9,000 0

3. 1,200 = 1,200 0

4. 2,400 = 2,400 0

5. -12,000+12,000 = 0 0

6. 3,000 = 0 3,000

7. -4,000 = -4,000 0

8. -2,400 = -2,400 0

9. 0 = -1,200 1,200

10. -1,000 = 0 -1,000

Totals $23,200 = $5,000 $18,200

Explanation:

a) Data and Analysis:

1. Cash, $15,000 Common Stock

2. Cash $9,000 Bank Loan $9,000

3. Cash $1,200 Deferred Revenue $1,200

4. Supplies $2,400 Accounts Payable $2,400

5. Prepaid Rent $12,000 Cash $12,000

6. Accounts Receivable $3,000 Service Revenue $3,000

7. Bank Loan $4,000 Cash $4,000

8. Accounts Payable $2,400 Cash $2,400

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10. Dividends $1,000 Cash $1,000

7 0

3 years ago

Time to reach a financial goal You have $42,180.53 in a brokerage account, and you plan to deposit an additional $5,000 at the e

andrew11 [14]

Answer:

It take to reach your goal is 11 years

Explanation:

given data

initial fixed amount = $42,180.53

deposit additional = $5,000

account totals = $250,000

expect to earn r = 12%

solution

we will apply Future value of annuity that is express as

Future value of annuity = initial fixed amount × $(1+r)^{t}$ + deposit additional × $\frac{(1+r)^t-1}{r}$ ......................a

put here value and we get

$250,000 = 42,180.53 \times (1+0.12)^{t} + 5,000 \times \frac{(1+0.12)^t-1}{0.12}$

solve it we get

time t = 11

so it take to reach your goal is 11 years

6 0

3 years ago