Calculate the total deposits be after the implementation of 30% LGS ratio
To calculate the total deposits after the implementation of a 30% LGS (loan-to-deposit) ratio, we first need to determine the potential amount of loans that the bank can provide based on this ratio.
If the bank has $1,000,000 in deposits before the implementation of the 30% LGS ratio, the bank can provide loans up to $300,000 (30% of $1,000,000) while maintaining this ratio.
Therefore, the total deposits after the implementation of the 30% LGS ratio would be $1,000,000 + $300,000 = $1,300,000.
Can u dumb it down please
Sure! Let's say a bank has $1,000 in deposits. With a 30% LGS ratio, they can only use $300 of that money to give out as loans.
After giving out the loans, the total deposits left in the bank would be the initial $1,000 plus the $300 used for loans, which equals $1,300.