First National Bank Assets Liabilities and Net Worth US Treasury Bonds $450,000 Net Worth $500,000 Reserves (Cash) $175,000 Checkable Deposits $250,000 Loans $125,000 Second National Bank Assets Liabilities and Net Worth US Treasury Bonds $100,000 Net Worth $250,000 Reserves (Cash) $250,000 Checkable Deposits $100,000 Third National Bank Assets Liabilities and Net Worth US Treasury Bonds $900,000 Net Worth $1,000,000 Reserves (Cash) $350,000 Checkable Deposits $500,000 Loans $250,000


The Required Reserve Ratio is 25% for all banks. Assuming that all the customers that have outstanding loans have used all of those additional funds to invest in new machinery for their businesses (therefore, the amount of Checkable Deposits is the true liability the bank has to its customers), then $_____________ is the resulting change to the loan creating potential of the whole system (these three banks) as a result of Second National Bank customers depositing an additional $400,000 in their Checkable Deposit accounts in new loans.

Answers

Answer 1

As a result, the system's overall capacity to create loans increases by $750,000.

what are the assets and liabilities of the First National Bank?

For all banks, a 25% reserve ratio is necessary. This means that banks can lend out the remaining 75% of their checkable deposits after holding 25% of them as reserves.

Before Second National Bank's clients added another $400,000 to their checkable deposit accounts, the sum of the three banks' checkable deposits was as follows:

$250k First National Bank

$100,000 Second National Bank

$50000 Third National Bank

There were $850,000 worth of checkable deposits in the system.

Each bank needs to have the following reserves:

First National Bank: 25% times $250 000 is $62,500

Second National Bank: 25% times $100,000 equals $25,000.

Third National Bank: $125,000 x 25% of $500,000

$212,500 in total reserves are needed for the system.

The banks had $637,500 ($850,000 - $212,500) available for loans prior to the additional deposit. The system's total checkable deposits rose to $1,250,000 ($850,000 + $400,000) after customers of Second National Bank added an extra $400,000 to their accounts.

The updated necessary reserves for any bank are:

First National Bank: 25% times $250 000 is $62,500

Second National Bank: $125,000 x 25% of $500,000

Third National Bank: $187,500 ($25% x $750,000)

The system now has to have reserves of $375,000 ($62,500 + $125,000 + $187,500).

As a result, Second National Bank clients depositing an additional $400,000 in new loans in their checkable deposit accounts has the following impact on the system as a whole (these three banks):

$750,000 is equal to $1,250,000 (new checkable deposits) minus $375,000 (new needed reserves) and $125,000 (current Second National Bank reserves).

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Calculate your month 1 expenses by adding the contents of column 8, your month 1 expenses. What is the total amount?

Answers

The total amount after adding month 1st expenses in the 8th column is 53,900$.

How to find?

Lets add all the values in column 8-

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Wages, salaries, repairs, rent, and depreciation are all examples of expenses. Profits are calculated by subtracting expenses from revenue. To lessen the tax burden and increase profits, businesses are permitted to deduct certain costs from taxes.

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A.
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Although part of your question is missing, you might be referring to this full question:

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AAAAAAAA B CC DDDD EEEE IIII K LL NNNNNNN RRR TT U Y

1. D _ C _ S _ O _

2. C _ A _ I _ E _

3. A _ A _ O _ D _

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6. B _ R _ A _ L _

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Answers

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