Agricultural Economics 3rd Edition by Evan Drummond, John Goodwin

Exercise 4

The pound (£) and the euro (€) are the currencies of England and Germany, respectively. On January 1, 2009 a German investor withdrew € 10,000 from his account and bought British pounds, which he then deposited in a London account that earns 7 percent per annum (simple interest, payable annually). On January 1, 2010, he withdrew all the pounds that had accumulated and converted them back to euros. How many euros did he receive? The relevant exchange rates are