Question

Which of the following would create the most money?

The initial deposit is $3,000 and the required reserve ratio is 10 percent.
The initial deposit is $6,500 and the required reserve ratio is 20 percent.
The initial deposit is $7,500 and the required reserve ratio is 25 percent.
The initial deposit is $4,500 and the required reserve ratio is 15 percent.

Answer 1

The initial deposit is $6,500 and the required reserve ratio is 20 percent

Answer 2

More money would be created if the initial deposit was $7500 with a required reserve ratio of 25 percent, since interest would be produced over $5400. In the remaining cases, the interest would be produced on lower amounts of money. In my opinion, I would choose the option of $6500 initial deposit with a required reserve ratio of 20 percent, as the interest would be produced over $5200. In that case, with much less investment, the earning would be similar to the highest option.