Answered

Discover the best answers at Westonci.ca, where experts share their insights and knowledge with you. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform. Get detailed and accurate answers to your questions from a dedicated community of experts on our Q&A platform.

Springfield Bank holds $280 million in total deposits and $40.7 million in total reserves. With a required reserve ratio of 11.5 percent, how much in excess reserves is Springfield Bank holding?
a) $239.3 million
b) $247.8 million
c) $36 million
d) $32.2 million
e) $8.5 million

Sagot :

Answer:

e) $8.5 million

Explanation:

The computation of the excess reserve is shown below:

We know that

Excess reserve = total reserve - required reserve

where

Required reserve is

= Total deposits × required reserve ratio

= $280 × 11.5%

= $32.20

So, the excess reserve is

= $40.7 - $32.20

= $8.5 million

Thank you for visiting our platform. We hope you found the answers you were looking for. Come back anytime you need more information. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.