If the spot exchange rate between euros and dollars is €1.5/$ before the dollar depreciates by 10%,how many dollars will it now (after the depreciation has occurred)take to pay an invoice of €500?

Question

Quizplus · Accepted Answer

Before the depreciation, the exchange rate was €1.5/$. This means that to get $1, you would need to pay €1.5.

After the depreciation of the dollar by 10%, the new exchange rate would be:

€1.5/$ x 0.9 = €1.35/$

Now we need to find out how many dollars it would take to pay an invoice of €500.

€500 ÷ €1.35/$ = $370.37

Therefore, it would take $370.37 to pay the invoice after the depreciation has occurred.

The correct answer is B.

If the Spot Exchange Rate Between Euros and Dollars Is