Ninth national bank holds $150,000,000 in checkable deposits and $12,000,000 in total reserves. with a required reserve ratio of 8 percent, how much in excess reserves is ninth national holding?

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07-05-2017
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Ninth national bank holds $150,000,000 in checkable deposits and $12,000,000 in total reserves. with a required reserve ratio of 8 percent, how much in excess reserves is ninth national holding?

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BlueSky06 BlueSky06 · Answer 1 · 2017-05-20T17:32:43+02:00

BlueSky06 BlueSky06

20-05-2017

We are asked to solve for the excess reserves. There are given values such as:
Checkable deposits = $ 150,000,000
Total reserves = $12,000,000
Required reserve ratio = 8%

Solving for reserve amount, we have:
Reserve amount = 0.08 * $150,000,000 = $ 12,000,000

Solving for the excess:
Excess reserves = $ 12,000,000 - $12,000,000 = $0

The answer is $0.

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