Two weeks ago, you signed an employment contract and accepted the responsibility of a Branch Manager with the First Econ Bank in Arlington, TX.
On your first day of job, at the close of the business day (May 2nd, 2015) after a closer examination of the bank’s books, you determined that the First ECON Bank had:
$100M in Bank’s Equity
$100M in Borrowed Funds
$100M in Demand Deposits
$100M in NOW Deposits
$100M in Money Market Deposits
$100M in Savings Deposits
$100M in Time Deposits
And $16.8M in Automatic Transfer Savings (ATS) Deposits (overdraft protection)
Please calculate the actual dollar amount the First ECON Bank has to place aside to meet legal Reserve Requirements.
Note, you must show all the steps and thoroughly explain your calculations to receive the full credit.