I appreciate your assistance. However, I am confused about the whether the bank should expand its loans by adding the deposit in the amount of $70,000 to excess reserves in the amount of $6,500.

($70,000 + $6,500) = $76,500, for the 1st round of deposits?

The reserve ratio is 5%.

1/RR = 1/0.05 = 20

Do I use 20 rounds of bank deposits at $6,500 or 20 rounds at $76,500?

The reading material (Hubbard & O'Brien, 2018) is confusing.

Round 1 = $76,500.00 $6,500.00

Round 2 = + $72,675.00 + $6,175.00

Round 3 = + $69,041.25 + $5,866.25

Round 3 = + $65,589.19 + $5,572.94

Round 4 = + $62,309.73 + $5,294.29

Round 5 = + $59,194.24 + $5,029.58

Round 6 = + $56,234.53 + $4,778.10

Round 7 = + $53,422.80 + $4,539.19

Round 8 = + $50.751.66 + $4,312.23

Round 9 = + $48,214.08 + $4,096.62

Round 10 = + $45,803.38 + $3,891.79

Total Deposits: $583,235.86 $49,555.99

The reading material does not say if the bank is limited to 10 rounds of deposits. As you can see from the calculations above, there is a big difference between the amount of deposits when I added the initial deposit ($70,000 + $6,500) = $76,500 (0.95) for 10 rounds of deposits.

However, if I calculate just the excess reserves of $6,500 (0.95) for 20 rounds of deposits, the bank can expand its loans by approximately $130,000. I did not show the work to save time. Please help me to understand theory.

Thank you