In the late 1990s, many East Asian currencies suddenly and dramatically devalued. What is the percentage change in the value of a $75 million investment in Indonesia when the exchange rate changes from $1 = 1,000 rupiah to $1 = 7,000 rupiah?

Question

Quizplus · Accepted Answer

The investment value in rupiah initially is $75 million * 1,000 = 75 billion rupiah. After devaluation, $75 million is equivalent to 75 million * 7,000 = 525 billion rupiah. The percentage change is ((525 billion - 75 billion) / 525 billion) * 100 = 85.71 percent.

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