Answer:
Amount that Bank A can lend = (115 - 11.5) = $103.5 million
Explanation:
Bank A has checkable deposits of $100 million, vault cash equaling $1 million and deposits at the Fed (reserves) equaling $14 million. If the required reserve rate is ten percent what is the maximum amount Bank A could lend
Reserve requirement is the rate that banks must keep in reserve and are not allowed to lend.
Total amount with Bank A = $100 + $1 + $14 = $115 million
Required Reserve at 10% = $11.5 million
Amount that Bank A can lend = (115 - 11.5) = $103.5 million
