TOLFA Segment 11, Question 5

In 2005 a US bank received a deposit of $1,000 and legally made loans shortly afterwards of $10,000 at 6% interest, using the "Fractional Reserve" principle underwritten by government. What was the gross interest rate it earned on the money actually deposited? 6% a year
54% a year
60% a year
It didn't "earn" anything at all; it acted as a dangerous parasite.

Don't hurry away; even when you've got the right answer, try clicking on the others to see why they are wrong! Then when you have correctly answered this make notes in your student notebook, go to Question 6.

Segment 11 Page