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Money Multiplier Calculator

LAST UPDATE: August 26th, 2018

Money Multiplier Calculator

What is the Money Multiplier?

The Money Multiplier is a measurement of the maximum amount of commercial bank money that can be created in a fractional-reserve banking system.

Formula

Money Multiplier = 1 / Real Rate of Return

Example

If the real rate of return is 3.25% (0r 0.0325 as a decimal)

Money Multiplier = 1 / 0.0325 = 30.769

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