A bank initially has $190 million in assets and $150 million in liabilities.The banks net worth (capital)is _____________ million.If the bank's assets increase by 10% and its liabilities do not change,its capital increases by ____________ .

Question

Quizplus · Accepted Answer

The bank's net worth or capital is the difference between its assets and liabilities, which is:

$190 million - $150 million = $40 million

If the bank's assets increase by 10% to $209 million, its net worth/capital will also increase. The new net worth will be:

$209 million - $150 million = $59 million

The increase in net worth or capital is:

$59 million - $40 million = $19 million

To express the increase as a percentage of the original capital, we can use the formula:

% increase = (increase/original) x 100%

% increase = ($19 million/$40 million) x 100%

% increase = 47.5%

Therefore, the correct answer is B, $40;47.5%.

A Bank Initially Has $190 Million in Assets and $150