Answer:
$900
Step-by-step explanation:
Given that,
Excess reserves = $800
Reserve ratio = 30%
Total deposits into checking account = $1,000
Lends to Melanie = $600
Required reserves = 30% of Total deposits
= 0.3 × $1,000
= $300
Total excess reserves:
= Old excess reserves + New excess reserves
= $800 + $700
= $1,500
Total excess reserves after lending to Melanie:
= $1,500 - $600
= $900
Therefore, bank can lend an additional amount of $900.