The Russian financial crisis of 1998 caused Russia's currency to be dramatically devalued. What is the percentage change in value of a $100 million investment in Russia when the exchange rate changes from $1 = 6 rubles to $1 = 25 rubles?

Question

Quizplus · Accepted Answer

The initial value of the investment in rubles is $100 million * 6 rubles/$ = 600 million rubles. After the devaluation, the value in rubles is still 600 million, but in dollars, it is 600 million rubles / 25 rubles/$ = $24 million. The percentage change is (($24 million - $100 million) / $100 million) * 100% = -76%.

The Russian Financial Crisis of 1998 Caused Russia's Currency to Be