In order to calculate a bank’s required reserves.
We need to figure out the amount of deposits that they have and the reserve requirement.
The reserve requirement is set by the Federal Reserve Board and it varies from country to country.
In Canada, for example, it is 0.5% on demand deposits and 3% on time deposits.
For this calculation we will use an example where the deposit rate is set at 2%.
This article provides information about how a bank’s required reserves can be calculated with different types of deposit rates in different countries around the world.
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How a bank’s required reserves can be calculated with different types of deposit rates in different countries around the world?
It is needed to know what the reserve requirement for each country is, and then also calculate how much money there are deposited into that account.
So you have an idea of how many dollars will go towards meeting this reserve requirement.
For example, if we were calculating Canada’s required reserves, it would be 0.50% on demand deposits plus 0.30% on time deposits (a total of 0.80%).
So let’s use our previous calculation where $100 has been deposited and work backwards.