The required reserve ratio is the percentage of a customer's deposit that a bank is required to hold as reserves. In this case, the required reserve ratio is 25%, which means the bank must hold 25% of the customer's deposit as reserves and can lend out the remaining 75%.
If a customer deposits $300, the bank is required to hold 25% of this amount as reserves. To calculate the required reserves:
Required Reserves = (Required Reserve Ratio) x (Customer's Deposit)
Required Reserves = 0.25 x $300
Required Reserves = $75
So, the bank must hold $75 of the customer's deposit as reserves and can lend out the remaining $225 ($300 - $75).