What is the maximum loan that the bank could extend

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Reference no: EM13206901

suppose the reserve requirement is 10 percent and the balance sheet of the peoples national bank looks like the accompanying example.
ASSETS
vault cash - $20,000
deposits at fed - 30,000
securities - 45,000
loans - 120,000

LIABILITIES
checking deposits - $200,000
net worth - 15,000

answer the following:
A. what are the required reserves of people national bank? does the bank have any excess reserves?
B. what is the maximum loan that the bank could extend?
C. indicate how the banks balance sheet would be altered if it extended this loan.
D. suppose that the required reserves were 20 percent. if this were the case, would the bank be in a position to extend any additional loans?

Reference no: EM13206901

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