Bank A has checkable deposits of $510 million and total reserves of $55.2 million.The required reserve ratio is 9 percent.The bank has excess reserves of ______________ million.

Question

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The bank's required reserves are calculated as 9% of $510 million, which equals $45.9 million. Since the bank has total reserves of $55.2 million, the excess reserves are the difference between the total reserves and the required reserves, which is $55.2 million - $45.9 million = $9.3 million.

Bank a Has Checkable Deposits of $510 Million and Total