Question

The first deposit that apex savings bank received was $15,300. if the reserve rate at the time was 3.5%, how much of the deposit was apex savings bank required to keep on reserve? how much was it free to loan out?

Answer 1

Since the reserve as 3.5%, the amount to keep on reserve was 0.035*15,300 = $535.5

Amount it was free to loan out = 15,300-535.5 = $14,764.5