Consider the following information for the next 3 problems: Interest rate in the

Question

Consider the following information for the next 3 problems:          

Interest rate in the US            4%

Interest rate in Mexico 10%

Mexican peso MXN/USD exchange rate        $0.1000

Euro EUR/USD exchange rate            $1.11

Swiss Franc CHF/USD exchange rate $1.26

18. You start your trip off with $10,000. You travel to France and spend 4,000 euros. You then exchange your remaining euros for Swiss Francs and travel to Switzerland where you spend 3,000 Swiss francs. You then travel home, to the US and exchange your remaining Swiss francs for dollars. How many dollars do you have remaining? Assume exchange rates remain constant during your trip.

a.   $1,030.1

b.   $1,236.1

c.   $1,483.3

d.   $1,780.0

e.   $2,136.0

The answer is d. 1,780.0

Explanation / Answer

Expenses :

1) 4000 Euros which is equivalent to 4000 * 1.11 = 4440 Dollars

2) 3000 Swiz Francs which is equivalent to 3000 * 1.26 = 3780 Dollars

Thus we will be left with 10000 - 4440 - 3780 = 1780 Dollars

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