Banks can multiply money by using the cash from the people's deposits to give loans and receive an additional interest for the money they lent. If the minimum reserve is...say...20% the maximum ammount a bank could obtain is m=1/R namely 1 x 5/1 which equals 5. So from 100 $ they could create 500 $ by means of successive loans and deposits. However I can't understand how could this help the economy if the quantity of physical cash remains the same. So M0 remains 100$ but M1 or whatever keeps growing until reaching the limit at 500.