Suppose that Best National Bank currently has $150,000 in demand deposits and $97,500 in outstanding loans. The Federal Reserve has set the reserve requirement at 10%. Reserves=
Required Reserves=
Excess Reserves=

Reserves = $52,500

Required Reserves = $15,000

Excess Reserves = $37,500

Explanation:

Reserves of a bank refers to deposits held by the bank that have not be given out as loan. It is deposits minus loan. Reserves of the Best National Bank can therefore be calculated as follows:

Reserves = Demand deposits - Outstanding loans = $150,000 - $97,500 = $52,500

Required Reserves refers to the portion of the deposits of a bank that is legally required by the regulatory to be kept as reserves that cannot be loaned out by the bank. Required Reserves of Best National Bank can be calculated as follows:

Required Reserves = Demand deposits * Reserve requirement = $150,000 * 10% = $15,000

Excess Reserves refers to the reserves held by a bank in excess of its required required reserves. Therefore, excess reserves can be given out as loan by the bank. It is can be calculated as reserve minus required reserve for Best National Bank as follows:

Excess Reserves = Reserves - Required Reserves = $52,500 - $15,000 = $37,500

Based on the above, we have the following for Best National Bank:

Reserves = $52,500

Required Reserves = $15,000

Excess Reserves = $37,500