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This Question: 10 pts 1 of 20 (0 complete) The following data are given: E, =¥110 - $1.00 E +1 = ¥130 = $1.00 (one year later
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Answer #1

When $1000 is invested in the US, the future value of the money is the amount invested + the interest earned on it.

Hence future value is $1000 + 10% of 1000 = $1100 in US

$1000 when invested in Japan equals to 1000 * 110 = 110000 yen

interest rate in Japan is 8%

future value of investment in Japan = 110000 + 8% of 110000 = 118800 yen

1$ = 130 yen after a year

So, 1 yen = 1/130 $

future value in $ = 118800 * 1/130 = $913.85

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