If the Canadian dollar were replaced with a "new dollar" at an exchange rate of one new dollar for eight old dollars,then a mortgage of $200 000 would become a debt of 25 000 new dollars.

Question

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If the exchange rate is 1 new dollar for 8 old dollars, then $200 000 in old dollars would be equivalent to $200 000/8 = 25 000 new dollars. Therefore, the mortgage debt of $200 000 would become a debt of 25 000 new dollars if the Canadian dollar were replaced with a "new dollar".

If the Canadian Dollar Were Replaced with a "New Dollar