Ask Question
28 December, 16:33

A bank has a 5 percent reserve requirement, $5,000 in deposits, and has loaned out all it can given the reserve requirement. a. It has $25 in reserves and $4,975 in loans. b. It has $250 in reserves and $4,750 in loans. c. It has $1,000 in reserves and $4,000 in loans. d. None of the above is correct.

+1
Answers (1)
  1. 28 December, 16:56
    0
    Option B is the correct answer.

    It has $250 in reserves and $4,750 in loans.

    Explanation:

    5% of $5000.

    Reserves = 0.05*$5000 = $250

    Loan amount that can be given out = $5000 - $250 = $4750.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “A bank has a 5 percent reserve requirement, $5,000 in deposits, and has loaned out all it can given the reserve requirement. a. It has $25 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers