If the required reserves of a bank is 20% and N10 000 is paid into its demand deposit account, what is the excess reserves?
- N2000
- N18 000
- N12 000
-
N8 000
The correct answer is: D
Explanation
Reserve = \(\frac{20}{100} X 10,000 = 2000
Excess reserve = 10,000 - 2000 = 8000