solo savings bank received an initial deposit of $6000 it kept a percentage of this money in reserve based on the reserve rate a

Question

4 years ago

15

solo savings bank received an initial deposit of $6000 it kept a percentage of this money in reserve based on the reserve rate a

nd loaned out the rest the amount it loaned out was eventually all deposited back in the bank if the cycle continued indefinitely and eventually the $6000 turned into $200000 what was the reserve rate?

Mathematics

1 answer:

iogann1982 [59] · Answer 1 · 2021-12-16T00:12:40+03:00

Answer:

Reserve rate = 3%

Step-by-step explanation:

Reserve Ratio = Reserve Maintained with Central Bank / Deposit Liabilities × 100

Reserve maintained = $6,000

Deposit liabilities = $200,000

Reserve Rate = Reserve Maintained with Central Bank / Deposit Liabilities × 1000

=$6,000 / $200,000 × 100

=0.03 × 100

r=0.03 × 100

=3%

Therefore,

Reserve Rate =3%