The exchange rate between Korean and the USD is currently 1,100 Won = $1, and th

Question

The exchange rate between Korean and the USD is currently 1,100 Won = $1, and the exchange rate between the Pound and USD is .70 pound = 1 USD.

The exchange rate for the Won and USD:

1 Pound = ____ Won     

1100 / 0.7 = 1571.4     

1 Pound = 1571.43 Won

Suppose that the exchange rate between the Won and the USD changes to 1,000 Won = $1 and the exchange rate between the pound and the USD changes to .80 Pound = $1.

1) Has the dollar appreciated or depreciated against the won?

2) Has the dollar appreciated or depreciated against the pound?

3) Has the Won appreciated or depreciated against the pound?

Show the formula you used along with detailed calculations to get the answers in order to not get a downvote.

Explanation / Answer

Part 1) We have been given the following information

$1 = 1,100 Won ----------------- 1

$1 = 0.70 Pound ---------------- 2

1 Won = (1/1,000) $ = 0.0009 $

1 Pound = (1/0.70) $ = 1.43 $

Replacing the value of 2 in 1 we get the following

0.70 Pound = 1,100 Won

By dividing we will get the value of one pound in terms of Won

1 Pound = (1,100/0.70) Won

1 Pound = 1,571.43 Won

Or

1 Won = (0.70/1,100) Pound = 0.000636 Pound

Part 2) We have been given the following information

$1 = 1,000 Won --------------------- 3

$1 = 0.80 Pound ---------------------- 4

Replacing the value of 4 in 3 we get the following

0.80 Pound = 1,000 Won

By dividing we will get the value of one pound in terms of Won

1 Pound = (1,000/0.80) Won

1 Pound = 1,250 Won

Or

1 Won = (0.80/1000) Pound = 0.0008 Pound

1 Won = (1/1000) $ = 0.001 $

1 Pound = (1/0.80) $ = 1.25 $

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