Suppose there are only two banks in a country, Bank A and Bank B, each initially having 85 % of their liabilities in the form of customers' deposits. Bank A had $700 billion in assets and $244 billion in liabilities, and Bank B had $455 billion in assets and $182 billion in liabilities. There was a rumor that the bank with a lower amount in assets would experience negative worth in the short run. The news triggered a bank run, so depositors withdrew 60 % of their deposits from the lower-asset bank and put it all into the higher-asset bank, which held these funds as liabilities and did not issue any new loans. To protect against future bank runs, the government used a deposit insurance strategy and required the banks to pay an insurance premium. The insurance premium is 11 cents for every $100 in bank deposits when liabilities account for less than 60% of assets and 53 cents for every $100 in bank deposits for banks when liabilities account for 60 % or more of assets. Determine the total insurance premium Bank A will pay for its deposits. Assume that the total assets of both banks remained unchanged. Round any intermediate calculations and your final answer to two decimal places if necessary.



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