Bank A has checkable deposits of $140 million, vault cash of $1 million, and deposits at the Fed of $14 million. If the required reserve rate is 10%, how much excess reserves does Bank A hold?

To determine how much excess reserves Bank A holds, we first need to calculate the required reserves based on the given checkable deposits and the required reserve rate.

1. Calculate Required Reserves: Required reserves are calculated by multiplying the checkable deposits by the required reserve rate. [ \text{Required Reserves} = \text{Checkable Deposits} \times \text{Required Reserve Rate} = 140 \text{ million} \times 0.10 = 14 \text{ million} ]

2. Calculate Total Reserves: Total reserves include both vault cash and deposits at the Fed. [ \text{Total Reserves} = \text{Vault Cash} + \text{Deposits at the Fed} = 1 \text{ million} + 14 \text{ million} = 15 \text{ million} ]

3. Calculate Excess Reserves: Excess reserves are found by subtracting the required reserves from the total reserves. [ \text{Excess Reserves} = \text{Total Reserves} - \text{Required Reserves} = 15 \text{ million