1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Contact [7]
3 years ago
14

demand deposits of $10,000, the reserve requirement is .05, the Federal Funds rate is 6% and the Discount rate is 4% . How much

money can it loan out
Business
1 answer:
kolezko [41]3 years ago
6 0

Answer:

The amount of money the bank can loan out is $200,000.

Explanation:

a) Data and Calculations

Demand deposits = $10,000

Reserve requirement = 0.05

Federal Funds rate = 6%

Discount rate = 4%

The money the bank can loan out = Demand Deposit/Reserve Requirement

= $10,000/0.05

= $200,000

b) The amount that the commercial bank can loan out is determined by the amount of its deposits and the ratio of the reserve requirement.  The reserve requirement ratio gives the percentage of deposits that commercial banks must hold as reserves in their vaults. This implies that if the required reserve ratio is 5 percent, for instance, the bank must hold 5 percent of its deposits as required reserves. If demand deposits are $10,000, then $500 ($10,000 x .05) must be held as required reserves and then the bank can lend out $9,500 to the first customer.  However, this amount will expand because the customer keeps the amount within the bank, enabling the bank to lend out $200,000 from a deposit of $10,000.  The total amount the bank can lend out is calculated as $10,000/0.05.

You might be interested in
Which workers are required to handle money as part of their job qualifications?
melamori03 [73]
A
A lot of Money in that business
4 0
3 years ago
Read 2 more answers
Most banks now have customer relationship software that, when a customer contacts the bank, tells the service representative wha
Alenkinab [10]

Answer:

market penetration

Explanation:

According to my research on different business strategies, I can say that based on the information provided within the question this is a market penetration growth strategy. Selling more of an established product or service to customers that already purchase the product is a market penetration growth strategy. This is the case as long as the product is not newly developed.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

8 0
2 years ago
Dan has been directed to study the forces close to a company that affect its ability to serve its customers, such as the company
shutvik [7]

Answer:

Micro environment                                              

Explanation:

The institution's micro-environment comprises of those components that are manageable. Generally the micro-environment doesn't really impact all businesses in a sector in same manner, as the scale, efficiency, competence and approaches are different.

For instance, the suppliers of raw materials are giving big corporations more compromises. We might not offer small businesses the same concessions though. Thus, from the above we can conclude that the correct answer is micro-environment.

5 0
2 years ago
Equity Method for Stock Investment On January 4, Year 1, Ferguson Company purchased 108,000 shares of Silva Company directly fro
r-ruslan [8.4K]

Answer:

a)

January 4, year 1, investment in Silva Company (36% of outstanding stocks)

Dr Investment in Silva Company 5,184,000

    Cr Cash 5,184,000

July 2, year 1, distributed dividends ( $292,000 x 36%)

Dr Cash 104,400

    Cr Investment in Silva Company 104,400

December 31, year 1, net income reported by Silva Company ($971,000 x 36%)

Dr Investment in Silva Company 349,560

    Cr Revenue from investment in Silva Company 349,560

b)

Balance of Investment in Silva Company = $5,184,000 - $104,400 + $349,560 = $5,429,160

Explanation:

Since Ferguson exercises significant influence over Silva Company, they must record the investment using the equity method.

7 0
3 years ago
What is a consumer product?
Zepler [3.9K]

Answer:

sorry po talaga need po points

4 0
2 years ago
Read 2 more answers
Other questions:
  • Issuance of Materials On May 7, Bergan Company purchased on account 10,000 units of raw materials at $8 per unit. During May, ra
    13·1 answer
  • Which of the following is a PRE-READING activity designed to help build reading comprehension
    9·1 answer
  • It will take Cody 3 months to save up enough money to purchase a stereo. He has a credit card with a 12% interest rate. Cody’s f
    12·2 answers
  • Here is some basic data for Bella​ Company: Cost of materials purchases on account $ 81 comma 000 Cost of materials requisitione
    14·1 answer
  • A(n)__________is a branch of decision support systems (DSSs) that gives managers easy access to internal and external data and t
    12·1 answer
  • The following items could appear on a bank reconciliation:
    15·1 answer
  • Mark and Mike are having a few beers together. Mike tells Mark about his lifelong quest to find the elusive pink elephant in the
    5·1 answer
  • Administrative:
    13·1 answer
  • Suppose you have $1,325 and plan to purchase a 5-year certificate of deposit (CD) that pays 3.5% interest, compounded annually.
    6·1 answer
  • 7. Valuing semiannual coupon bonds Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual paymen
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!