Based on the amount the bank has as deposits and reserves and the reserve ratio, the highest loan it can make is $537.20.
The largest loan a bank can make is:
= Total reserves - Required reserves
Required reserves:
= Deposits x Reserve ratio
= 5,438 x 10%
= $543.80
Largest loan:
= 1,081 - 543.80
= $537.20
Largest loan this bank can make is $537.20.
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