In May 1995 when the exchange rate was 80 yen per dollar,Japan Life Insurance Company invested ¥800,000,000 in pure-discount U.S.bonds.The investment was liquidated one year later when the exchange rate was 110 yen per dollar.If the rate of return earned on this investment was 46% in terms of yen,calculate the dollar amount that the bonds were sold at:(Round your final answer to nearest thousand dollar)

Question

Quizplus · Accepted Answer

Let X = sale price of the bonds in U.S. dollarsThen, (X 110 - ¥800,000,000)/¥800,000,000 = 0.46110X/800,000,000 = 0.46 + 1X = 1.46 × ¥800,000,000/110 = $10,618,000

In May 1995 When the Exchange Rate Was 80 Yen