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Suppose that National Bank of Guerneville has $35 million in checkable deposits, Commonwealth Bank has $43 million in checkable deposits, and the required reserve ratio

Suppose that National Bank of Guerneville has $35 million in checkable deposits, Commonwealth Bank has $43 million in checkable deposits, and the required reserve ratio for checkable deposits is 10%. If National Bank of Guerneville has $4 million in reserves and Commonwealth has $5 million in reserves, how much in excess reserves does each bank have?

National Bank of Guerneville has:

$0.5 million in excess reserves.

Commonwealth Bank has:

$0.7 million in excess reserves.

1.) Now suppose that a customer of National Bank of Guerneville writes a check for $2 million to a real estate broker who deposits the check at Commonwealth. After the check clears, how much in excess reserves does each bank have?

National Bank of Guerneville has

$1.3 million in excess reserves.

Commonwealth Bank has?

Please show how to get -1.3 and solve for Commonwealth Bank.

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