One British pound can purchase 1.82 U. S. dollars today in the foreign exchange market and currency forecasters predict that the U. S. dollar will depreciate by 12 percent against the pound over the next 30 days. How many dollars will a pound buy in 30 days

Question

Jayson Palmer

Business

2 December, 16:17

One British pound can purchase 1.82 U. S. dollars today in the foreign exchange market and currency forecasters predict that the U. S. dollar will depreciate by 12 percent against the pound over the next 30 days. How many dollars will a pound buy in 30 days

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Answers (1)

Know the Answer?

Yazmin Morton · Answer 1

2.0384 U. S. dollars

Explanation:

Given that,

One British pound can purchase = 1.82 U. S. dollars

If U. S dollar depreciate by 12% then a person will be able to purchase more U. S dollars from one British pound.

British pound new exchange rate:

= Previous exchange rate * (1 + depreciation rate)

= 1.82 * (1 + 12%)

= 1.82 * 1.12

= 2.0384 U. S. dollars