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If a bank has a total of $80,000 in deposits and has made three loans in the amounts of $10,000, $20,000, and $30,000, what is this bank's reserve ratio (assuming it has no other deposits or made any other loans)?

a) 20%

b) 75%

c) 25%

d) 60%

Respuesta :

nicholaspayne8
The answer to your question would be (C) 25%

Answer:

The correct answer is letter "B": 75%.

Explanation:

Reserve Ratio is the amount of cash a bank must keep in its vault or deposit into a central government bank. The percentage is based on the bank’s total deposit. Governments often use the reserve requirement as a control of the money supply. The Reserve Ratio formula is:  

Reserve Ratio =  (Reserve requirement)/Deposit

In the example:

  • Reserve Ratio: x
  • Deposits: $80 000
  • Reserve requirement: $10 000 + $20 000 + $30 000 = $60 000

Thus,

Reserve Ratio (%)=  (Reserve requirement)/Deposit

                x(1/100)=  ($60 000)/($80 000)

                          x=  600/8

                          x= 75%

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