Assume you can exchange $100 today for C$109.58 or for 1,304 Mexican pesos. Assume that last year, $100 was equivalent to C$105.48 or 1,310 Mexican pesos. One hundred dollars converted into ________ last year can now be converted into ________.

Question

Quizplus · Accepted Answer

To find out the answer, we need to compare the percentage change in the exchange rates. 
For Canadian dollars: 
[(Current rate - Last year's rate) / Last year's rate] x 100
= [(109.58 - 105.48) / 105.48] x 100
= 3.88%
So, $100 in Canadian dollars last year is equivalent to $103.88 in Canadian dollars today. 
For Mexican pesos: 
[(Current rate - Last year's rate) / Last year's rate] x 100
= [(1304 - 1310) / 1310] x 100
= -0.46%
So, $100 in Mexican pesos last year is equivalent to $99.54 in US dollars today. 
Therefore, the best choice is D, Canadian dollars; $96.26.

Assume You Can Exchange $100 Today for C$109