19.3- Exchange rates Fred Nappa is planning to take a wine tasting tour through

Question

19.3- Exchange rates Fred Nappa is planning to take a wine tasting tour through Italy this summer. The will cost 2,750 euros and includes transportation, hotels, and guide. Fred estimates the round trip airfare from his home in North Carolina to Rome, Italy will be $1,490; he also will incur another $300 (U.S.) in incidental travel expenses. Fred estimates the cost of meals in Italy to be about 500, and he will take and additional $1,000 U.S. to cover miscellaneous expenditures. Currently the exchange rate in U.S. $1.3411/1.00 (or .74.56/US$1.00)

a) Determine the total dollar cost of the trip to Italy.

b) Determine the amount of euros Fred will need to cover meals and miscellaneous expenditures.

Explanation / Answer

Estimates of costs =

1) 2750 euro for transportation, hotels, and guide

2) 1490 dollars for airfare

3) 300 dollars for incidental travel expenses

4) 500 dollars for the cost of meals in Italy

5) 1000 dollars for other miscellaneous expenses

Exchange rate = U.S. $1.3411/1.00 or 0.7456/US$1.00

a) Total dollar cost of trip = 2750 euros for transportation, hotels and guides which is equal to 1.3411 * 2750 = 3688.03 dollars + 1490 dollars for airfare + 300 dollars for incidental travel expenses + 500 dollars for the cost of meals in Italy + 1000 dollars for other miscellaneous expenses = 6978.03

b) Amount needed to cover meals and miscellaneous expenses = 500 dollars + 1000 dollars = 1500 dollars. IN euros, the amount will be = 0.7456 = US$1.00 So, 1500 dollars will be = 1500 * 0.7456 = 1118.4 euros

I hope my solution solves your query.

Regards.

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