ABC Bank has total checkable deposits of $100 million in its account. Its capital, including common stocks, retained earnings, preferred stocks and subordinated debt is $10 million. The ratio of reserves requirement by the central bank is 8%. The bank invests in commercial loans with total loans value of $70 million.

There are unexpected deposit withdrawals of $35 million due to recession. To meet any shortfall in required reserves, ABC Bank decides to borrow from the Fed funds market for the remainder of the month, which is 28 days. The required yield on discount basis is 2.5%. How much will the bank owe when this debt matures? You must show your calculation