Third national bank has reserves of $20,000 and checkable deposits of $200,000. the reserve ratio is 10 percent. households deposit $15,000 in currency into the bank and that currency is added to reserves. what level of excess reserves does the bank now have?

Reserves - $20,000

Checkable Deposits - $200,000

Reserves Ratio - 10

Household Deposit - $15,000

Level of Excess Reserves - ?

Solution:

Checkable Deposits = $200,000 + $15,000 = $215,000

Required Reserves = 0.10 x $215,000 = $21,500

Excess Reserves = Actual Reserves - Required Reserves

= $35,000 - $21,500 = $13,500