What is the maximum loan that the bank could extend?

Suppose that the reserve requirement is 10 percent and the balance sheet of the Peoples National Ba Show more Suppose that the reserve requirement is 10 percent and the balance sheet of the Peoples National Bank looks like the accompanying example. What are the required reserves of Peoples National Bank? Does the bank have any excess reserves? What is the maximum loan that the bank could extend? Indicate how the banks balance sheet would be altered if it extended this loan (show the new t-account). 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? Explain. Assets Liabilities Vault Cash $20000 Checking deposits $200000 Deposits at Fed $30000 Net Worth $15000 Securities $45000 Loans $120000 Show less

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