Question

NewBank started its first day of operations with ?$128 million in capital. A total of ?$108 million in checkable deposits is received. The bank makes a ?$28 million commercial loan and another ?$27 million in mortgage loans. The required reserve ratio is 7.7?%. ?(?Note: Information is based on? NewBank's first month of? operations.)

Complete? NewBank's balance sheet shown? below: ?(Round your responses to the nearest whole? number.)

Assets:

Required reserves ?$ ? million

Excess reserves ?$ ? million

Loans ?$ ? million

Liabilities:

Checkable deposits ?$ ?million

Bank capital ?$ ? million

Answer 1

Checkable deposits = $108 million

Required reserve ratio = 7.7% or 0.077

Required reserves = $108 million * 0.077 = $8 million

Excess reserves = Checkable deposits - Required reserves - Loans

Excess reserves = $108 million - $8 million - ($28 million + $27 million) = $45 million

Following is the complete balance sheet of New Bank -

Assets	Amount	Liabilities	Amount
Required reserves	$8 million	Checkable deposits	$108 million
Excess reserves	$45 million	Capital	$128 million
Loans	$55 million