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If the reserve rate is 3% and a bank receives a deposit of $16,000, how much of the $16,000 is the bank free to loan out?

2 Answers

3 votes

Answer: C

Explanation:

User Nadavwr
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3 votes

The reserve rate is what the bank keeps. This means it can loan out ( 100% -3%) = 97% of the deposit.

16,000 x 0.97 = $15,520 can be loaned out.

User AndaluZ
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