A small state bank currently has reserves equal to $300,000. If the state reserve requirement is
20%, but the bank feels more comfortable with maintaining a 30% reserve, what amount of deposits does the bank currently have?

a. $1,500,000
b. $600,000
c. $1,000,000
d. $300,000
e. None
of the above.

Question

A small state bank currently has reserves equal to $300,000. If the state reserve requirement is
20%, but the bank feels more comfortable with maintaining a 30% reserve, what amount of deposits does the bank currently have?

a. $1,500,000
b. $600,000
c. $1,000,000
d. $300,000
e. None
of the above.

amistre64 · Answer

reserve = deposits(requirement)

300,000 = D(.3)

300,000/.3 = D

D = 3,000,000/3 = 1,000,000

anonymous · Answer

1;000;000