1. Exchange rate relationships between the U.S. dollar and the euro have been qu

Question

1. Exchange rate relationships between the U.S. dollar and the euro have been quite volatile. When the euro began trading at the beginning of 1999, it was valued at 1.18 U. S. dollars. By late 2000, a euro was worth only $.82. However, by mid 2008, a value of a euro reached $1.55. Calculate the percentage changes in the value of a euro from its initial value to its late 2000 value and to its high mid 2008 value.

Explanation / Answer

value of euro at initially 1999=1.18$; late 2000= .82$: mid 2008 =1.55$; 1> % change initial 1999 to late 2000= '(new value-old value)/old value; ={(.82-1.18)/1.18}*100 =-30.508%; 2> % change initial 1999 to mid 2008= '(new value-old value)/old value; ={(1.55-1.18)/1.18}*100; = 31.3559%

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