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Strayer Finance 100 Week 2 Homework

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Question;Chapter 3;P1. The;Following three one-year ?discount? loans are available to you;Loan A: \$120,000 at a 7% discount rate;Loan B: \$110,000 at a 6% discount rate;Loan C: \$130,000 at a 6.5% discount rate;Determine;the dollar amount of interest you would pay on each loan and indicate the;amount of net proceeds each loan would provide. Which loan would provide you;with the most upfront money when the loan takes place?;B. Calculate;the percent interest rate or effective cost of each loan. Which one has the;lowest cost?;P5.;Following are selected balance sheet accounts for the Third State Bank: vault;cash = \$2 million, U.S. government securities = \$5 million, demand deposits =;\$13 million, non-transactional accounts = \$20 million, cash items in process of;collection = \$4 million, loans to individuals = \$7 million, loans secured by;real estate = \$9 million, federal funds purchased = \$4 million, and bank;premises = \$11 million.;A. From these accounts, select only the asset accounts and;calculate the bank?s total assets.;B.;Calculate the total liabilities for the Third State Bank.;C.;Based on the totals for assets and liabilities, determine the amount in the;owners? capital account.;Chapter 4;P5.;The Friendly National Bank holds \$50 million in reserves at its Federal Reserve;District Bank. The required reserves ratio is 12 percent.;A. If the bank has \$600 million in deposits, what amount of vault;cash would be needed for the bank to be in compliance with the required;reserves ratio?;B. If the bank holds \$10 million in vault cash, determine the;required reserves ratio that would be needed for the bank to avoid a reserves;deficit.;C. If the Friendly National Bank experiences a required reserves;deficit, what actions can it take to be in compliance with the existing;required reserves ratio?

Paper#49921 | Written in 18-Jul-2015

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