Q.The reserve ratio is 10% and the initial deposit is ₹5,000. Find

Total deposits are the initial deposit times the multiplier; the newly created credit is that total minus the original deposit. …

Given: reserve ratio $r = 10\% = 0.10$; initial deposit $D = ₹5{,}000$.

Step 1 — (b) Credit multiplier.

Step 2 — Total deposits created.

Step 3 — (a) Total credit (new loans) created. This is total deposits minus the initial deposit:

$\text{Credit Created} = 50{,}000 - 5{,}000 = ₹45{,}000$ …

Formula method for credit: total credit created directly $= D \times \dfrac{1-r}{r} = 5{,}000 \times 9 = ₹45{,}000 …

Confusing 'total deposits created' (₹50,000) with 'credit/loans created' (₹45,000) — the newly created credit excludes the original ₹5,000, which was not crea …