Am I solving correctly ?

Q3) First National bank (FNB) holds $120,000 million in deposits and maintains a reserve ratio of 3 percent.

1. Create a T-account for FNB

Deposits = 120,000 million

R= 3% of 120,000 million= 3600 million (120,000*3/100)

Loans= 120,000- 3600 = 116,400 million.

2. Calculate money supply?

Money Supply = Currency + Deposit

Money Supply = 116,400 + 120,000

= 236,400 million.

3. Calculate money multiplier?

• Bank A:

Deposits = 120,000 million

R= 3% of 120,000 million= 3600 million (120,000*3/100)

Loans= 120,000- 3600 = 116,400 million.

• Bank B:

Deposits = 116,400 million

R= 3% of 116,400 million= 3,492 million (116,400*3/100)

Loans= 116,400- 3,492 = 112,908 million.

Money Supply = Currency + Deposit

Money Supply = 112,908+ 116,400

= 229,308 million.

• Bank C :

Deposits = 112,908 million

R= 3% of 112,908 million= 3,388 million (116,400*3/100)

Loans= 112,908- 3,388 = 109,520 million.

Money Supply = Currency + Deposit

Money Supply = 109,520+ 112,908

= 222,428 million.