Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / suppose that amazon bank has $915 million as daily average total in net transaction accounts over 14 days of computation period on which reserve requirments applies

suppose that amazon bank has $915 million as daily average total in net transaction accounts over 14 days of computation period on which reserve requirments applies

Finance

suppose that amazon bank has $915 million as daily average total in net transaction accounts over 14 days of computation period on which reserve requirments applies. His daily vault cash has been $35 million over the computation period In addition the reserve carry forward from prior period is $2.56 million. using above information what will be the maximum reserve requirement?

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

Answer :

Net transaction accounts = $915m

From the federal reserve website

Exemption amount = $16.9m

Low reserve tranche = $127.5m

Since Net transaction accounts > Low reserve tranche

Amount reserved at 3% = Low reserve tranche - Exemption amount = $127.5m - $16.9m = $110.60m

Amount reserved at 10% = Net transaction accounts - Low reserve tranche= $915m- $127.5m = $787.50m

Gross Reserve Requirement = Amount reserved at 3% * 3% + Amount reserved at 10% * 10%

= $110.60m * 3% + $787.50m* 10%

= $3.32m + $78.75m= $82.07m

Daily Average Vault Cash = $35m

Reserve carry forward from prior period is $2.56m

Maximum reserve requirement = $82.07m - $35m - $2.56m

= $44.51m

Related Questions