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The graph below shows the exchange rate between South African Rand (abbreviated ZAR) and United States Dollars (USD), as ZAR/USD.

13 12 6 4 3 2 90 92 94 96 98 O0 02 O4 O6 י0810 12 14

From 1990 to 2000, was the rand appreciating against the dollar or depreciating? Explain.

How many rand could 100 US dollars have been exchanged for in 2004, when the exchange rate was (approximately) 6 ZAR/USD?

How many US Dollars could 500 rand have been exchanged for in 2014, when the exchange rate was (approximately) 10 ZAR/USD?

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Answer #1

a) From 1990 to 2000, the Rand is depreciating as we have to pay more and more Rand to get a dollar. Starting from 90's the Rand per dollar was 2 which increased to 7 by the end of decade. Thereby depreciating the Rand.

b) If the Exchange rate is 6 ZAR / USD. Then for 100 USD we can get 100 x 6 = 600 ZAR.

c) If the exchange rate is 10 ZAR / USD then 500 Rand can get 500 / 10 = 50 USD.

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