Question

The First National Bank has total deposits of $675,000 and excess reserves of $22,300. If the required reserve ratio is 9 percent, the First National Bank has total reserves of:

Answer 1

Answer: $83050

Step-by-step explanation:

Based on the information given in the question, the total reserves of First National Bank will be given as follows:

Total deposit = $675000

The Required reserve ratio will be:

= 675000 × 9%

= 675000 × 9/100

= $60750

Since the bank has excess reserves of $22,300, then the total reserve will be:

= $60750 + $22300

= $83050