Oldhat Financial starts its first day of operations with â$12 million in capital. A total of â$140 million in checkable deposits are received. The bank makes a â$25 million commercial loan and another â$60 million inâ mortgages, with the followingâ terms: 200 standard 30â-year, âfixed-rate mortgages with a nominal annual rate ofâ 5.25%, each for â$300, 000. Assume that required reserves are 8â%.(a) What does the bank balance sheet look like?(b) How well capitalized is the bank?

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Calculating the Return On A Loan