Reserve Ratio Calculator

How to use the reserve ratio calculator

What this calculator does

This calculator connects four quantities in a simplified fractional-reserve banking identity: Deposits, Reserves, Loanable funds, and the Reserve ratio. Choose any supported pair under Calculate from, enter those two values, and the calculator solves the remaining figures. It also reports the Simple deposit multiplier, equal to one divided by the reserve ratio when the ratio is above zero. The tool is useful for classroom exercises, policy scenarios, bank-balance-sheet illustrations, and checking arithmetic in economic models. It does not determine a bank's legal compliance, liquidity position, capital adequacy, or actual lending capacity. In the United States, the Federal Reserve states that reserve requirement ratios have been zero since March 26, 2020, so a hypothetical nonzero ratio should not be mistaken for a current U.S. legal requirement. See the Federal Reserve's explanation of reserve requirements.

When to use it

Use this calculator to test how a chosen reserve share divides a deposit base, reconstruct a missing balance-sheet figure from two known amounts, compare higher- and lower-reserve scenarios, or illustrate the mechanical link between a reserve ratio and the textbook deposit multiplier. It is also helpful when reviewing an economics assignment that gives reserves and deposits but asks for loanable funds, or gives loanable funds and a ratio but asks for the implied deposit base.

How to calculate

1. The calculator opens with a ready-to-use example: $1,000,000 of deposits and $100,000 of reserves. Results and a validated Excel workbook are available immediately.
2. Under Calculate from, select the two figures you know. Only those inputs remain editable; solved fields are updated automatically.
3. Enter dollar amounts using digits with an optional decimal point and commas, such as 1,250,000.50. Enter the reserve ratio as a percentage, such as 12.5 for 12.5%.
4. Read the primary Reserve ratio, then review Deposits, Reserves, Loanable funds, and the Simple deposit multiplier. The deposit-allocation chart and calculation table use the same current model.
5. Select Download Excel to export the current valid state. Reset clears the demonstration data, results, chart, table, and workbook state; Excel export remains unavailable until a complete valid pair is entered again.

Input guide

Calculate from is required and selects the two independent values. A common choice is “Deposits + reserves.” Deposits is a required nonnegative dollar amount in modes that use it; $1,000,000 is a realistic example. Increasing deposits while holding the reserve ratio constant raises both reserves and loanable funds. Do not enter a percent in this field. Reserves is a required nonnegative dollar amount in its modes; $100,000 is the startup example. When deposits are also supplied, reserves cannot exceed deposits. Loanable funds is a required nonnegative dollar amount in its modes; $900,000 is the example. It represents deposits minus reserves, not a promise that every dollar will be lent. Reserve ratio is a required percentage from 0 through 100 in its modes; enter 10 for 10%. A higher ratio increases reserves and reduces loanable funds for a fixed deposit base. At 0%, the simple multiplier is undefined rather than infinite, because the inverse formula is not meaningful at zero.

Output guide and worked example

Reserve ratio is reserves divided by deposits and is displayed as a percentage. Deposits, Reserves, and Loanable funds are dollar amounts. Their exact identity is deposits = reserves + loanable funds. Simple deposit multiplier is a theoretical ratio, displayed with an × symbol; lower positive reserve ratios produce higher multipliers. It is an illustrative ceiling under restrictive assumptions, not an estimate of realized money creation. The summary pills repeat the reserve share, loanable share, and multiplier. In the table, Measure names each component, Amount reports dollars, Share of deposits reports its percentage of deposits, and Identity shows the equation used. In the startup example, reserves of $100,000 divided by deposits of $1,000,000 equal 0.10, or 10.00%. Loanable funds equal $1,000,000 – $100,000 = $900,000.00, the loanable share is 90.00%, and the simple multiplier is 1 ÷ 0.10 = 10.00×.