Use the table, which shows a banks balance sheet, to solve the following problem. The desired reserve ratio on all deposits is 5 percent and there is no currency drain.

a. Calculate the banks excess reserves. If the bank uses all of the excess reserves to make a loan, what is the quantity of the loan and the quantity of total deposits after the bank has made the loan?

\begin{tabular}{lclc} \hline \hline \multicolumn{3}{c}{ Assets } & \multicolumn{2}{c}{ Liabilities } \\ \hline & (millions of dollars) \\ \hline Reserves at the Fed & 25 & Checkable deposits & 90 \\ Cash in vault & 15 & Savings deposits & 110 \\ Securities & 60 & \\ Loans & 100 & \\ \hline \hline \end{tabular}