Question

Fiona deposits $2,000 into a savings account. if the fed requires a 20 percent reserve ratio, how much of fiona’s money can the bank lend?

Answer 1

$1,600, since 20% must remain in the account.

Answer 2

The amount the the fed require =

20/100 x 2,000 = 400

The amount of money that Fiona's bank can lend is : $ 2,000 - $ 400
= $ 1,600

Hope this helps