The reserve requirement is 10%.
Suppose that Jack transfers $30,000 from an account at First Bank to a checking account at Second Bank. Second Bank's total reserves will increase by $--- . Of that, Second Bank is required to hold--- in reserves, and thus can loan out a maximum of $---.
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Second Bank's total reserves will increase by $30,000.
Of that, Second Bank is required to hold 10% in reserves, which would be $3,000.
Therefore, Second Bank can loan out a maximum of $27,000 ($30,000 - $3,000).
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First, we need to calculate the total reserves increase for Second Bank.
Second Bank's total reserves will increase by the amount transferred by Jack, which is $30,000.
Next, we need to calculate the amount that Second Bank is required to hold in reserves. The reserve requirement is given as 10%.
To calculate the required reserves, we multiply the transferred amount by the reserve requirement:
Required Reserves = $30,000 x 10% = $3,000.
Finally, we can calculate the maximum loanable amount for Second Bank, which is the remainder after deducting the required reserves from the total reserves increase:
Maximum Loanable Amount = Total Reserves Increase - Required Reserves = $30,000 - $3,000 = $27,000.
Therefore, Second Bank's total reserves will increase by $30,000. Of that, Second Bank is required to hold $3,000 in reserves, and thus can loan out a maximum of $27,000.
To find out how Second Bank's total reserves will increase after Jack transfers $30,000 from First Bank, we need to calculate the reserve requirement and the maximum loanable amount.
Given that the reserve requirement is 10%, we can first calculate the increase in reserves by multiplying the transfer amount by the reserve requirement:
Increase in reserves = $30,000 * 10% = $3,000
So, Second Bank's total reserves will increase by $3,000.
Now, let's find out how much of that increase Second Bank is required to hold in reserves. If the reserve requirement is 10%, then Second Bank must hold this percentage of the increase in reserves:
Reserves required = Increase in reserves * Reserve requirement = $3,000 * 10% = $300
Therefore, Second Bank is required to hold $300 in reserves.
Finally, the maximum loanable amount can be calculated by subtracting the required reserves from the increase in reserves:
Maximum loanable amount = Increase in reserves - Reserves required = $3,000 - $300 = $2,700
Hence, Second Bank can loan out a maximum of $2,700.