Round A Deposits A Reserves A Loans 1st $10,000 $2,000 $8,000 2nd 3rd 4th Sth The first round has been completed in the table. Now, recalling that the new loans in the first round become the new deposits in the second round, complete the second round in the table. Then by using the same approach, complete the entire table. a. b. This deposit-creation process could go on forever, but it would still have a finite sum. The eventual total change in deposits is equal to 1/v times the new deposit, where v is the target reserve ratio. What is the eventual total change in deposits in this case? с. What is the eventual total change in reserves? What is the eventual change in loans?

Round A Deposits A Reserves A Loans 1st $10,000 $2,000 $8,000 2nd 3rd 4th Sth The first round has been completed in the table. Now, recalling that the new loans in the first round become the new deposits in the second round, complete the second round in the table. Then by using the same approach, complete the entire table. a. b. This deposit-creation process could go on forever, but it would still have a finite sum. The eventual total change in deposits is equal to 1/v times the new deposit, where v is the target reserve ratio. What is the eventual total change in deposits in this case? с. What is the eventual total change in reserves? What is the eventual change in loans?

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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Part 1 You have P10,000 to invest. You do not want to take any risk, so you will put the funds in a savings account at the local bank. Of the following choices, which one will produce the largest sum at the end of 22 years? An account that compounds interest. please explain 1.1 Annually 1.2 Daily 1.3 Quarterly 1.4 Monthly 2. The company is setting aside funds to acquire a property for its new warehouse. The company needs P74,735 to make the down payment. The company deposits P5,000/month in the fund account which pays 1% per month. As the financial manager you have been tasked to determine how long it will take to accumulate enough funds to acquire the property? 3. Suppose you are 40 years old and plans to retire in exactly 20 years. Twenty one years from now you will need to withdraw P50,000 per year from your retirement fund to add to your SSS pension. Assume you are to live for 85 years, how much money should you place in the retirement fund each year for the next 20…
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