Question

What ratio is calculated to figure out the required reserve ratio for a bank?

Answer 1

$10 million in deposits and $500,000 are required to be held in reserve

Answer 2

The required reserve ratio can be calculated by simply dividing the amount of money a bank is required to hold in reserve by the amount of money it has on deposit. For example, if a bank has $10 million in deposits and $500,000 are required to be held in reserve, then the required reserve ratio would be 1/20 or 5%