the reason why an individual would want to use a bank is to hold their money till they need it. ex: if i was wanting to buy something or needed to pay something i would go to the bank to get the money out of my savings.
a business might want to use a bank so that they can build up savings to buy or upgrade something in the place of business. ex: i want to buy new computers and printers for my employees.
a federal reserve is a central banking system used by the USA
the money supply can majorly affect people and businesses by either giving the person or business a major increase in money or it could take away the amount of money a person or business has.
banking affects the money supply by making it easier to keep track of your money, holding your money till you want to use it, or it can make it to where you can automatically use your money when you do not want to use it which can make a person not want to use a bank at all.
if banking did not exist people would not be able to make checks or keep track of their money, people would have to keep their money on them at all times, or people would be stolen from more frequently, and would not have credit or debt cards to hold all of their money on.