If a bank has deposits of $100,000, cash in its vault of $10,000, and $15,000 on deposit at the Federal Reserve and if the required reserve ratio is 20%, then the bank has:

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The required reserves for the bank would be 20% of the $100,000 in deposits, which is $20,000. The bank currently has $25,000 in reserves ($10,000 in vault cash + $15,000 at the Federal Reserve), so it has excess reserves of $5,000 ($25,000 - $20,000 = $5,000).

If a Bank Has Deposits of $100,000, Cash in Its