Question

2. Below are bank bid and ask mates Bid rate of S0.018554/Philippine Peso Ask rate of $0.019614/Philippine Peso Bid rate of S0.031160/Taiwan New Dollar Ask rate of $0.033160/Taiwan New Dollar Bid rate of $0.008951/Japanese Yen Ask rate of $0.009251/Japanese Yen You start a trip to the Philippines with $1.500 in cash and convert that amount into Philippine Pesos (PHP). You are able to pay everything by credit card, so you convert your Philippine Pesos back into U.S. dollars when you leave. a. Calculate the number of PHP you receive. b. Calculate the number of dollars you have when you leave. You then travel to Taiwan, and convert all the U.S. dollars you have upon leaving the Philippines into Taiwanese Dollars (TWD). You are once again able to pay everything by credit card, so you convert your Taiwanese Dollars back into U.S. dollars when you leave. c. Calculate the number of TWD you receive. d. Calculate the number of dollars you have when you leave. You then travel to Japan, and convert all the U.S. dollars you have upon leaving Taiwan into Japanese Yen (JPY). You are once again able to pay everything by credit card, so you convert your Japanese Yen back into U.S. dollars when you leave for home. a. Calculate the number of JPY you receive. b. Calculate the number of dollars you have when you leave.

Answer 1

(a). Bid rate $0.018554/peso or (1/$0.018554) = 53.897peso per dollar

Ask rate $0.019614/peso or (1/$0.019614) = 50.984peso per dollar

Number of peso = $1500 * 53.897peso per dollar = 80845.5 peso

(b). Number of dollars received at time we leave = 80845.5 peso/50.984peso per dollar =$1585.7

(c). Bid rate = $0.031160/Taiwan New dollar or (1/0.031160) = 32.09 Taiwan New Dollar per Dollar

Ask rate = $0.033160/Taiwan New Dollar or (1/0.033160) = 30.157 Taiwan New Dollar per dollar.

Number of Taiwan Dollar we receive = $1585.7 * 32.09Taiwan New Dollar per Dollar = 50885.11 Taiwan New Dollar

(d). Number of dollars we receive at the time we leave = 50885.5 / 30.157 =  $1687.34

(e). Bid rate = $0.008951/Japanese Yen or (1/0.008951) = 111.72Japanese Yen / dollar

Ask rate = $0.009251/Japanese Yen or (1/0.009251) = 108.09Japanese Yen/dollar

Number of Japanese Yen we receive = $1687.34*111.72 = 188509.62 Japanese Yen

(f). Number of dollars we receive at the time we leave = 188509.62/108.09 = $1744