Question
If a customer deposits $10,000 into a bank, how much money would the bank be capable of lending to an eligible loan applicant if this bank retains 20 percent of the deposit to cover withdrawals?
about $8,000
about $9,000
about $2,000
about $7,000
about $8,000
about $9,000
about $2,000
about $7,000
Answers
GPT-4o mini
When a customer deposits $10,000 into a bank, and the bank retains 20% to cover withdrawals, we first need to calculate how much the bank retains and then how much it can lend out.
1. Calculate the amount retained by the bank:
\[
\text{Amount retained} = 20\% \times 10,000 = 0.20 \times 10,000 = 2,000
\]
2. Calculate the amount available for lending:
\[
\text{Amount available for lending} = \text{Total deposit} - \text{Amount retained}
\]
\[
= 10,000 - 2,000 = 8,000
\]
Therefore, the bank would be capable of lending about **$8,000** to an eligible loan applicant.
1. Calculate the amount retained by the bank:
\[
\text{Amount retained} = 20\% \times 10,000 = 0.20 \times 10,000 = 2,000
\]
2. Calculate the amount available for lending:
\[
\text{Amount available for lending} = \text{Total deposit} - \text{Amount retained}
\]
\[
= 10,000 - 2,000 = 8,000
\]
Therefore, the bank would be capable of lending about **$8,000** to an eligible loan applicant.