The table below shows the balance sheet of Eubank which holds no excess reserves.Assume that the required reserve ratio is 10%.If a student deposits $10,000 in cash into his checkable deposit account,Eubank will have _____ in excess reserves?
Table 14.1
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EUBANK
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$$\begin{array}{lrrr}\text{ Assets }& \text{ Liabilities and Net Worth }& & \\ & & & \\ \text{ Deposits at the Fed }& \$40,000& \text{ Checkable deposits }& \$500,000\\ \text{ Cash }& \$10,000& \text{ Net Worth }& \$20,000\\ \text{ Loans }& \$300,000& & \\ \text{ Securities }& \$150,000& & \\ \text{ Fed Stock }& \$20,000& & \end{array}$$

A) $10,000
B) $1,000
C) $9,000
D) $60,000
E) $6,000

With the deposit of $10,000, the total checkable deposits become $510,000. The required reserves are 10% of $510,000, which is $51,000. Before the deposit, required reserves were 10% of $500,000, which is $50,000. The bank had $40,000 in deposits at the Fed and $10,000 in cash, totaling $50,000, exactly meeting its required reserves before the deposit. After the deposit, the bank's actual reserves increase to $60,000 ($40,000 at the Fed + $10,000 existing cash + $10,000 new cash deposit). With required reserves of $51,000 after the deposit, the bank has $60,000 - $51,000 = $9,000 in excess reserves.