Question

also b

Isaac Díez. Isaac Diez Peris lives in Rio de Janeiro. While attending school in Spain he meets Juan Carlos Cordero from Guatemala. Over the summer holiday Isaac decides to visit Juan Carlos in Guatemala City for a couple of weeks. Isaac's parents give him some spending money, R$4,700. Isaac wants to exchange it for Guatemalan quetzals (GTQ). He collects the following rates Spot rate on the GTQe exchange rate is GTQ 10.5461 = €1.00 Spot rate on the E/RS exchange rate is 0.4106 R$1.00 a. What is the Brazilian real/Guatemalan quetzal cross rate? b. How many quetzals will Isaac get for his reais? a. What is the Brazilian real/Guatemalan quetzal cross rate? The cross rate is GTO RS. (Round to four decimal places.)

Answer 1

a.

We want to find out GTQ/R$ cross rate or how many GTQ are equivalent to 1 R$, given that

$GTQ \:10.5461=\euro 1.00$ ..........(1)

$\euro 0.4106=R\$ 1.00$ ............(2)

Multiply both sides of the 1st equation with 0.4106.

$0.4106(GTQ \:10.5461)=0.4106(\euro 1.0)$

$GTQ \:4.3302=\euro 0.4106$ ..........(3)

Looking at equation (2) and (3) we have

$GTQ \:4.3302=R\$ 1.00$

This is the required cross rate.

b.

The value of R$ 4,700 in GTQ is simply calculated by multiplying it with the above calculated exchange rate. so the amount of quetzals that Isaac gets for his reals is:

$= 4,700 * 4.3302$

$= 20,351.94\ quetzals$