If the required reserves of a bank is 20% and N10 000 is paid into its demand deposit account, what is the excess reserves?
-
A.
N2000 -
B.
N18 000 -
C.
N12 000 -
D.
N8 000
Correct Answer: Option D
Explanation
Reserve = (frac{20}{100} X 10,000 = 2000
Excess reserve = 10,000 – 2000 = 8000