How To Calculate

Learn how to calculate anything
Menu
  • bmi
Home
rate
How to Calculate Money Multiplier.
rate

How to Calculate Money Multiplier.

Rosemary Njeri

The money multiplier refers to how an initial deposit can lead to a bigger final increase in the total money supply.

The size of the multiplier depends on the percentage of deposits that banks are required to hold as reserves.

Formula to calculate money multiplier.

Calculate Money Multiplier.

Reserve ratio is the proportion of customers’ deposits that a bank holds as reserves in the form of cash.

Example:

Suppose the reserve ratio is 5%, calculate the money multiplier.

Calculate Money Multiplier.

Therefore, the money multiplier is 20.

Share
Tweet
Reddit
Pinterest
Email
Prev Article
Next Article

Related Articles

How to Convert Ratio to Fractions.
Before learning how to convert ratio to fractions, lets define …

How to Convert Ratio to Fractions.

How to Calculate Cap Rate.
Cap rate also known as capitalization rate is the rate …

How to Calculate Cap Rate.

Popular Posts

    Categories

    learntocalculate.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

    How To Calculate

    Learn how to calculate anything

    Pages

    • About Us
    • Contact Us
    • Privacy Policy
    Copyright © 2025 How To Calculate

    Ad Blocker Detected

    Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker.

    Refresh