The desired reserve ratio is 10 percent.A bank with $10 million in deposits has $700,000 in vault cash and $200,000 on deposit with the Bank of Canada.A person deposits a cheque for $1 million in the bank.The excess reserves of the bank are now

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The bank's total reserves before the deposit were $900,000 ($700,000 in vault cash + $200,000 at the Bank of Canada). 
The required reserve based on the $10 million deposit is $1 million (10% of $10 million). 
Since the bank already had $900,000 in reserves, it only needed to hold an additional $100,000 ($1 million minus $900,000) in reserves after the deposit. Therefore, the excess reserves are $800,000 ($900,000 current reserves minus $100,000 required reserves).

The Desired Reserve Ratio Is 10 Percent