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New Bank started its first day of operations with $8 million in capital. $200 million in checkable deposits is received. The bank issues a $65
New Bank started its first day of operations with $8 million in capital. $200 million in checkable deposits is received. The bank issues a $65 million commercial loan and another $45 million in mortgages, with the following terms:
Mortgages: 100 standard 30-year, fixed-rate with a nominal annual rate of 6.75% each for $450,000.
Commercial loan: 3-year loan, simple interest paid monthly at 1.25%/month.
If required reserves are 10%, what does the bank balance sheets look like? Ignore any loan loss reserves.
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