Question

Suppose that the Bank of Apples has excess reserves of $450,000 and checkable deposits of $30,000,000. If the bank has a reserve requirement of 30 percent, what is its total amount of reserves?

Answer 1

$9,450,000

Step-by-step explanation:

To determine the amount of reserves that the Bank of Apples has, we first have to multiply the total amount of checkable deposits by the reserve requirement, and then add the excess reserves.

($30,000,000 x 30%) + $450,000 = $9,000,000 + $450,000 = $9,450,000