Bank profits: Bank of America has deposit liabilities of $$100$ million.

It only keeps the minimum cash reserves required by law of $10\%($rrr$=10\%).$

Its annual costs $($wages$,$ rent, utilities, etc.$)$ are $$2\mathrm{.}5$ millions.

$1.$ What is Bank of America$$s net profit under the following circumstances?

Boa$$s balance sheet.

$2.$ It charges $7\%$ annual interest on its loans, and pays $2\%$ annual interest on its deposits.

$3.$ The interest rates are as in part $($a$)$ above, but due to uncertain economic conditions; Bank of America decides to hold $$10$ millions in excess reserves.

$4)$ From part b$,$ Show how BOA makes a loan to Chase

$5.$ How much would money supply change as a result of an increase in total deposits of $$100$ millions? $($MS$=$MB$*$ Money Multiplier$)$