Consider a U.S.importer desiring to purchase merchandise from a Dutch exporter invoiced in euros,at a cost of €512,100.The U.S.importer will contact his U.S.bank (where of course he has an account denominated in U.S.dollars)and inquire about the exchange rate,which the bank quotes as €1.0242/$1.00.The importer accepts this price,so his bank will ________ the importer's account in the amount of ________.

Question

Quizplus · Accepted Answer

To convert €512,100 to USD at the exchange rate of €1.0242/$1.00, divide €512,100 by €1.0242 to get approximately $500,000. The importer's account will be debited this amount to pay for the purchase.