Question

if the required reserve ratio is 20 percent and a customer deposited 5,000 in the bank how much is available to the bank for lending?

Answer 1

If the required reserve ratio is 20 percent and a customer deposited 5,000 in the bank how much is available to the bank for lending?ANSWER : $4,000

-Gradpoint

Answer 2

The available balance in the bank for lending is 4000.

Explanation:

It is given that the required reserve ratio is 20 percent and a customer deposited 5,000.

It means the 20% of 5000 must be save as required reserve ratio and the remaining part is the available balance in the bank for lending.

`5000* (20)/(100)=1000`

It means the reserved amount is 1000. The available balance in the bank for lending is

`5000-1000=4000`

Therefore the available balance in the bank for lending is 4000.