You just came back from India, where the Indian Rupee was worth $.015. You still

Question

You just came back from India, where the Indian Rupee was worth $.015. You still have INR 50,000 from your trip and could exchange them for dollars at the airport, but the airport foreign exchange desk will only buy them for $.0125. Next week, you will be going to Canada and will need Canadian Dollars (CAD). The airport foreign exchange desk will sell you pesos for $.70 per CAD. You met a tourist at the airport who is from Canada and is on his way to India. He is willing to trade your INR 50,000 for CAD. What is the minimum amount of CAD you should want for your INR? Explain.

Explanation / Answer

Minimum amount of CAD required = (50000 * rate available at airport desk for $/INR)/ ($/CAD)

= 50000* 0.0125/0.7 = 892.85 CAD

This is because any exchange rate offered by tourist below airport desk exchange rate becomes irrelevant as you can exchange at airport rate in that case

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.