Required reserve ratio = (Reserves - Excess reserve) / deposits x 100%
= (400 - 160) / 1200 x 100%
= 20%
New reserves = $400 - $100 (withdraw) = $300
New cash in hand = $200 + $100 (withdraw) = $300
Maximum deposits = New reserves * Maximum banking multipler
= $300 * 1 / 20%
= $1500
Money supply = New cash in hand + Deposits
= $300 + $1500
= $1800