A commercial bank has $1,000,000 of customer checking deposits and actual reserves of $300,000.If the reserve ratio is 20 percent,what is the maximum amount of new loans the bank can extend?

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The maximum amount of new loans the bank can extend is $100,000. This is because the bank must maintain a reserve ratio of 20%, which means that it must hold $200,000 in reserves for every $1,000,000 in deposits. The bank currently has $300,000 in reserves, so it can extend up to $100,000 in new loans without violating the reserve ratio.

A Commercial Bank Has $1,000,000 of Customer Checking Deposits and Actual