# Money Multiplier Calculator

URL: https://speedycalculator.com/calculators/finance/money-multiplier/
Last updated: 2026-10-25

> The money multiplier calculator works out how much the money supply can expand from new reserves under fractional reserve banking – the simple multiplier 1 ÷ reserve ratio, and the version including cash held by the public.

## Inputs

- Reserve requirement ratio (%)
- Currency-to-deposit ratio (%)
- Excess reserve ratio (%)
- New reserves (deposit)

## Results

- Simple money multiplier
- Money multiplier (with currency and excess reserves)
- Maximum change in money supply

## Formula

```
Simple money multiplier = 1 ÷ reserve requirement ratio
With currency: m = (1 + c) ÷ (r + c + e), c = currency ratio, e = excess reserve ratio
Maximum change in money supply = multiplier × change in reserves
```

## Explanation

The textbook money multiplier is a simplification: in practice banks lend based on demand and capital, and the U.S. reserve requirement has been 0% since March 2020.

### How to use the Money Multiplier Calculator

- **Reserve requirement ratio**
- **Currency-to-deposit ratio**
- **Excess reserve ratio**
- **New reserves (deposit)**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the reserve requirement, currency-to-deposit ratio, excess reserves ratio and the change in reserves.

### Tips

- Use real (inflation-adjusted) figures to compare across years.
- Check whether data are seasonally adjusted.
- Use the same currency and base year throughout.
- Economic models simplify reality – treat results as illustrations, not forecasts.

### Common mistakes to avoid

- Mixing nominal and real values.
- Comparing percentage changes with percentage-point changes.
- Treating correlations as causes.

### Inputs explained

FieldWhat to enterReserve requirement ratioIn %Currency-to-deposit ratioIn %Excess reserve ratioIn %New reserves (deposit)Amount in your currency

### What each result means

- **Simple money multiplier** = 100÷[Reserve requirement ratio]
- **Money multiplier (with currency and excess reserves)** = (1 + [Currency-to-deposit ratio]÷100)÷([Reserve requirement ratio]÷100 + [Currency-to-deposit ratio]÷100 + [Excess reserve ratio]÷100)
- **Maximum change in money supply** = [New reserves (deposit)]×[Money multiplier (with currency and excess reserves)]

### Example values

How the main result changes when **Reserve requirement ratio** changes and everything else stays at the example values above:

Reserve requirement ratio (%)Money multiplier (with currency and excess reserves)5207.513.33101012.58156.67205

## Worked example

Inputs — Reserve requirement ratio: 10 %; Currency-to-deposit ratio: 0 %; Excess reserve ratio: 0 %; New reserves (deposit): $1,000.

Results — Simple money multiplier = 10; **Money multiplier (with currency and excess reserves) = 10**; Maximum change in money supply = $10,000.00.

## FAQ

**What is the money multiplier?**
How much the money supply can grow per dollar of reserves.

**What is the formula?**
1 ÷ reserve requirement in its simplest form.

**Is the reserve requirement still used?**
The U.S. cut it to 0% in 2020; other countries still use it.

**What formula does the Money Multiplier Calculator use?**
Simple money multiplier = 1 ÷ reserve requirement ratio.


## Sources

- [Federal Reserve – Reserve requirements](https://www.federalreserve.gov/monetarypolicy/reservereq.htm)