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erma4kov [3.2K]
4 years ago
14

A bank received an initial deposit of $9,000, kept a percentage of this money in reserve based on a reserve rate of 9% and loane

d out the rest. The amount it loaned out all was eventually deposited back into the bank. if this cycle continued indefinitely, how much money eventually resulted from the initial deposit?
Mathematics
1 answer:
Dovator [93]4 years ago
8 0

The initial deposit is $9,000. The bank kept 9% of this amount in reserve and landed out the rest. So, the bank kept $810 as reserve and loaned out as $8190. The process repeated itself and this time the bank kept $737.10 as reserve and loaned out as $7452.90. This process will repeat itself indefinitely.

So, we will have a geometric series with r< 1 and with infinite terms.

Also, the total money creation is initial deposit times money multiplier.

Here Money multiplier = \frac{1}{reserve rate} = \frac{1}{0.09}

Hence, the money creation = 9000 \times \frac{1}{0.09} = 100,000

So, the total money that resulted from the initial investment is $100,000.

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4 years ago
I need help with this ASAP
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C

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3 years ago
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Angle 2 and angle 11 are alternate exterior angles. Line G and line L are parallel lines. Think of them as train tracks. On the outside or exterior of the train tracks is angle 2 and angle 11.

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7 0
3 years ago
She ate 1/8 of a pie and her brother ate 1/6 of the pie show my how u got your answer
Andre45 [30]

Answer:

7/24 of the pie was eaten

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first multiply both parts of the fraction 1/8 by 3/3 to get 3/24

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