How much wealthier would you be one year from now if you exchange $100,000 (U.S.) into Hong Kong Dollars today at an indirect rate of HK$7.8/$, earn 7% on your Hong Kong investment, and exchange back at a rate of HK$8.0/$, as compared to investing in the U.S.at 4.0%?

Question

Quizplus · Accepted Answer

First, convert $100,000 to HKD at 7.8, resulting in HK$780,000. After earning 7%, you have HK$834,600. Convert back to USD at 8.0, resulting in $104,325. In the U.S., $100,000 grows to $104,000 at 4%. The difference is $325.

How Much Wealthier Would You Be One Year from Now