Asksia AI LOGO

Sia

Question
Statistics
Posted 7 months ago

The Iron Bank has a reserve requirement of 20%20 \%. It currently has $200,000\$ 200,000 in checking deposits, $100,000\$ 100,000 in savings deposits, and has made $50,000\$ 50,000 in loans to businesses

How much is the bank required to keep in reserves?
Choose 1 answer:
(A) $30,000\$ 30,000
(B) $40,000\$ 40,000
(C) $90,000\$ 90,000
(D) $25,000\$ 25,000
(द) $60,000\$ 60,000
Sign in to unlock the answer
Answer from Sia
Posted 7 months ago
Solution by Steps
step 1
Calculate the total amount of deposits by adding checking and savings deposits: TotalDeposits=$200,000+$100,000Total Deposits = \$200,000 + \$100,000
step 2
Apply the reserve requirement percentage to the total deposits to find the reserve amount: RequiredReserves=TotalDeposits×20%Required Reserves = Total Deposits \times 20\%
step 3
Substitute the values into the formula: RequiredReserves=($200,000+$100,000)×20%Required Reserves = (\$200,000 + \$100,000) \times 20\%
step 4
Perform the calculation: RequiredReserves=$300,000×0.20Required Reserves = \$300,000 \times 0.20
step 5
Calculate the final amount: RequiredReserves=$60,000Required Reserves = \$60,000
Answer
E
Key Concept
Reserve Requirement Calculation
Explanation
The reserve requirement is calculated by applying the reserve ratio to the total amount of deposits a bank has.

Not the question you are looking for? Ask here!

Enter question by text

Enter question by image

Unlock Smarter Learning with AskSia Super!

Join Super, our all-in-one AI solution that can greatly improve your learning efficiency.

30% higher accuracy than GPT-4o
Entire learning journey support
The most student-friendly features
Study Other Question