If a bank has a required reserve ratio of 15 percent and has required reserves of $225,000,000,how much does the bank hold in deposits?
A) $33,750,000
B) $210,000,000
C) $240,000,000
D) $1,500,000,000
E) There is not enough information to solve this problem.

Question

Quizplus · Accepted Answer

The required reserves are calculated as a percentage of the total deposits. If the required reserve ratio is 15%, then $225,000,000 represents 15% of the total deposits. To find the total deposits, divide the required reserves by the reserve ratio: $225,000,000 / 0.15 = $1,500,000,000.

If a Bank Has a Required Reserve Ratio of 15