# ratio

If you deposit \$8,000 in a bank, calculate how much the bank must keep as required reserves and how much it can loan out if the required reserve ratio was 5percent. If it was 8 percent? 13 percent? 26 percent?
##### Solution Preview:
Deposit= \$8,000, Ratio= 5%
With a ratio of 5 percent, required reserves = \$400 and loanable funds = \$7,600.
Deposit= \$8,000, Ratio= 8%
With a ratio of 8 percent, required reserves = \$640 and loanable funds = \$7,360.
Deposit= \$8,000, Ratio= 13%
With a ratio of 13 percent, required reserves = \$1,040 and loanable funds = \$6,960.
Deposit= \$8,000, Ratio= 26%
With a ratio of 26 percent, required reserves = \$2,080 and loanable funds = \$5,920

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