Suppose 144 yen could be purchased in the foreign exchange market for one U.S.dollar today.If the yen depreciates by 6.0% tomorrow,how many yen could one U.S.dollar buy tomorrow?
A) 180.1152
B) 158.7456
C) 154.1664
D) 152.6400
E) 189.2736

Question

Quizplus · Accepted Answer

If the yen depreciates by 6.0%, it means that one U.S. dollar can buy more yen than before. We can calculate this using:

New exchange rate = old exchange rate * (1 - depreciation rate)
New exchange rate = 144 * (1 - 0.06)
New exchange rate = 144 * 0.94
New exchange rate = 135.36 yen per dollar

Therefore, one U.S. dollar could buy 135.36 yen tomorrow, which is closest to choice D (152.6400) but none of the choices exactly match the answer.

Suppose 144 Yen Could Be Purchased in the Foreign Exchange