Tenth National Bank holds $285 million in checkable deposits and $35 million in reserves.With a required reserve ratio of 11 percent,how much in excess reserves is Tenth National holding?

Question

Quizplus · Accepted Answer

First, calculate the required reserves by multiplying the checkable deposits by the required reserve ratio: 
$285 million x 0.11 = $31.35 million

Then, subtract the required reserves from the actual reserves: 
$35 million - $31.35 million = $3.65 million

Therefore, the amount of excess reserves that Tenth National is holding is $3.65 million.

Tenth National Bank Holds $285 Million in Checkable Deposits and $35