Question

If a bank has total deposits of $7,700 and reserves of $2,100: instructions: round to the nearest whole number. (a) what is its current reserve ratio? % (b) how large is its loan portfolio (outstanding loans)? %

Answer 1

A.What is the total amount of deposits?_Deposits= ($2,000 – $500)/.20 =$7,500

b.What is the total amount of loans? _Loans = $7,500 - $2,000 = $5,500_