In the late 1990s, many East Asian currencies suddenly and dramatically devalued. What is the percentage change in value of a $10 million investment in Indonesia when the exchange rate changes from $1 = 3,000 rupiah to $1 = 10,000 rupiah?

Question

Quizplus · Accepted Answer

The initial value of the investment in rupiah is $10 million * 3,000 = 30 billion rupiah. After the devaluation, $10 million is equivalent to 10 billion rupiah. The percentage change is ((10 billion - 30 billion) / 30 billion) * 100% = -66.67%, which is approximately a 70% decrease in value.

In the Late 1990s, Many East Asian Currencies Suddenly and Dramatically