The First State Bank of South Dakota in Sioux Falls,South Dakota,has the following items on its ledgers: (All numbers in millions.)
Time deposits: $6,000
Consumer loans: $6,000
Cash in vault: $400
South Dakota State Bonds: $2,000
Demand deposits: $10,000
Loans to businesses: $2,000
Miscellaneous liabilities: $1,000
Deposits with the Federal Reserve System: $1,600
U.S.Government Bonds: $4,000
a.Place them on the appropriate side of the balance sheet.Compute the bank's net worth.
b.If the reserve requirement is 15 percent on demand deposits,and 0 percent on time deposits,what are the bank's required reserves? Excess reserves?
c.By how much can this bank increase its loans? Explain.

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The Answer of The First State Bank of South Dakota in Sioux Falls,South Dakota,has the following items on its ledgers: (All numbers in millions.)
Time deposits: $6,000
Consumer loans: $6,000
Cash in vault: $400
South Dakota State Bonds: $2,000
Demand deposits: $10,000
Loans to businesses: $2,000
Miscellaneous liabilities: $1,000
Deposits with the Federal Reserve System: $1,600
U.S.Government Bonds: $4,000
a.Place them on the appropriate side of the balance sheet.Compute the bank's net worth.
b.If the reserve requirement is 15 percent on demand deposits,and 0 percent on time deposits,what are the bank's required reserves? Excess reserves?
c.By how much can this bank increase its loans? Explain.