Need help with this assignment. I think I'm doing it correctly(?) but this is new material for me. Any suggestions on Problems 1 and 2 is appreciated and help with Problem 3, as well. Thanks in advance!

Problem 1: Charlie Brown is digging around in his attic and nds $2,000 in an old trunk. He takes the money to his bank and deposits the $2,000 in his checking account. Explain the rst four rounds of the deposit creation process if the required reserve ratio is 25 percent and if people keep no currency outside of the banking system. Show your calculations. Deposit Required Reserves Excess Reserves $2,000 $500 $1,500 $1,500 $375 $1,125 $1,125 $281.25 $843.75 $843.75 $210.94 $632.81 a. Based on your answers above, what is the total amount of loans that can be created 'orn the $2,000 deposit? In the rst four stages of the deposit creation process, $3,468.75 in loans can be created. This is just the rst four stages, though, and much more money can be created. Following the formula to calculate increase in checkable bank deposits from amount in excess reserves (excess reserves divided by reserve ratio), You nd that $1 ,500f0.25 = $6,000. This is the total amount of money that can be created based on the amount of excess reserves from the $2,000 deposit and the 25% reserve ratio. Problem 2: If Looney Tunes Bank receives an additional deposit of $50,000 and the required reserve ratio is 18 percent, what is the amount of new loans Looney Tunes Bank can make. Show any calculations. Increase in checkable bank deposits = excess reserves divided by reserve ratio = (50,000 - (50,000 x 0.18) ) l 0.18 = 41,000 / 0.18 = 227,777.78 Problem 3: The required reserve ratio is 25 percent. Porky Pig deposits $1,000 in Looney Tunes Bank. Looney Tunes Bank keeps its minimum required reserves and lends the excess to Peppy LaPew. Peppy LaPew spends his loan at Wal- Mart. Wal-Mart deposits the check it receives 'om Peppy LaPew in The Jedi Credit Union. Jedi Credit Union keeps its minimum required reserves and lends the excess to Dorothy of Kansas. Dorothy of Kansas spends her loan at Over The Rainbow Shoe Store. Over the Rainbow Shoe Store deposits the check it receives from Dorothy of Kansas in the Wonderland Savings and Loan. Wonderland Savings and Loan keeps its minimum required reserves and lends the excess to the Mad Hatter to help cover costs for his annual tea party. How much can Wonderland Savings and Loan lend to the Mad Hatter? Show how you got your