creadit creation(3)

Fractional-reserve banking refers to the common banking practice of issuing more credit than the bank holds as reserves. Banks in modern economies typically loan their customers many times the sum of the credit reserves than they hold
If we imagine a bank which has $100 in reserves, with a 20% reserve ratio the bank would be able to lend up to $400 without breaching the ratio. Hence, through each round of lending a portion is held in reserve until that portion approaches a limit of Zero and the issued credit lent into existence approaches of a limit of $400. Thus begetting a sum total of credit dollars approaching $500 total dollars .
Therefore, you can calculate the total credit dollars by using this formula:
Total credit dollars = 1/reserve ratio