Question

Postal Express has outlets throughout the world. It also keeps funds for transactions purposes in many foreign countries. Assume in 2010 it held 380,000 reals in Brazil worth 310,000 dollars. It drew 12 percent interest, but the Brazilian real declined 24 percent against the dollar. a. What is the value of its holdings, based on U.S. dollars, at year-end? (Do not round intermediate calculations.) X Answer is complete but not entirely correct. Value of the holdings 347,200 x b. What is the value of its holdings, based on U.S. dollars, at year-end if instead it drew 9 percent interest and the real went up by 13 percent against the dollar? (Do not round intermediate calculations.) X Answer is complete but not entirely correct. Value of the holdings $ 8,332,800 X

Answer 1

1 А. B с D E Question A 2 Year 2010 Year 2011 3 Amount in Brazilian reals 380000 Amount in Brazilian reals =B3*(1+B6) 4 Amount in US Dollars 310000 Amount in US Dollars =E3/E5 5 Real/USD Rate =B3/B4 Real/USD Rate =B5*(1+B7) 6 Interest Rate in Brazil 0.12 7 Exchange rate Depreciation 0.24 8 9 Question B 10 Year 2010 Year 2011 11 Amount in Brazilian reals 380000 Amount in Brazilian reals =B11*(1+B14) 12 Amount in US Dollars 310000 Amount in US Dollars =E11/E13 13 Real/USD Rate =B11/B12 Real/USD Rate =B13*(1-B15) 14 Interest Rate in Brazil 0.09 15 Exchange rate Appreciation 0.13