Calculate the credit created where initial deposit amount to 10,000 shillings, cash ratio 5%and four banks are involved
| Banks | New deposit | Cash ratio | Loans |
| 1 | 10.000 | (5/100) x 10,000 = 500 | 9500 |
| 2 | 9500 | (5/100) x 9500 = 475 | 9025 |
| 3 | 9025 | (5/100) x 9025 = 451.25 | 8573.75 |
| 4 | 8773.75 | (5/100) x 8573.75 = 428.69 | 8145.06 |
Total deposit = 10,000 + 9500 + 9025 + 8573.75 + 8145.06 = 37,098.75shillings
CATEGORIES Economics
TAGS Dr. Bbosa Science
