If a bank has a required reserve ratio of 30 percent, excess reserves of $45,000,000, and deposits of $100,000,000, how much can the bank lend out?

A. $13,500,000

B. $30,000,000

C. $43,500,000

D. $45,000,000

E. $145,000,000

option (D) $45,000,000

Explanation:

Data provided in the question:

Required reserve ratio of bank = 30 percent

Excess reserves = $45,000,000

Deposits = $100,000,000

Now,

The maximum amount of loan that the bank can lend out will be equal to the amount of existing excess reserves that the bank has with them.

Therefore,

The maximum loan bank can lend out = Excess reserves

or

The maximum loan bank can lend out = $45,000,000

Hence,

The correct answer is option (D) $45,000,000