Question

Part III: The third deposit that Apex Savings Bank received was $17,900. IfApex Savings Bank was free to loan out $17,452.50, what was the reserverate at the time? How much was it required to keep on reserve?

Answer 1

Given:

The Apex bank receives the amount of $17900.

The amount free to loan out is $17452.50.

Explanation:

Determine the amount keep on reserve.

$\begin{gathered} R=17900-17452.50 \\ =447.5 \end{gathered}$

The reserve rate is given on amount that bank received which means,

$\frac{r}{100}\cdot17900=447.5$

Here, r is reserve rate.

Simplify the equation for r.

$\begin{gathered} \frac{r}{100}\cdot17900=447.5 \\ r=\frac{44750}{17900} \\ =2.5 \end{gathered}$

So reserve rate is 2.5% and recerve amount is $447.5.