Question

If a customer deposits $10,000 into a bank, how much money would the bank be capable of lending to an eligible loan applicant if this bank retains 20 percent of the deposit to cover withdrawals? about $9,000

Answer 1

Deposit - $10,000
Retains - 20%
How much is needed to cover the withdrawals?
($10,000)(.20) = $8,000

$8,000 is what the bank would retain to cover withdrawals.