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A new bank has vault cash of $1.7 million and $5 million in deposits held at its Federal Reserve District Bank.   a) the required reserves ratio is 8 percent, approximately what dollar amount of deposits can the bank hold? (Answer in millions)

A new bank has vault cash of $1.7 million and $5 million in deposits held at its Federal Reserve District Bank.   a) the required reserves ratio is 8 percent, approximately what dollar amount of deposits can the bank hold? (Answer in millions)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A new bank has vault cash of $1.7 million and $5 million in deposits held at its Federal Reserve District Bank.

 

a) the required reserves ratio is 8 percent, approximately what dollar amount of deposits can the bank hold? (Answer in millions)

Bank deposits   $Type your answer here  million

 

 

b) If the bank holds $72 million in deposits and currently holds bank reserves such that excess reserves are zero, what required reserves ratio is implied? (Round answer to 1 decimal place, e.g. 5.1.)

Required reserves ratio   Type your answer here

 

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