Question

Today, you can exchange $1 for £.5926. Last week, £1 was worth $1.6729 How much profit or loss would you now have in pounds if you had converted £100 into dollars last week and back into pounds this week?

Answer 1

Answer:

If you exchanged 100£ to dollars last week and then exchange this amount to pounds today you have a loss of 0.87£.

Explanation:

To know the profit or loss in pound we first convert the 100 £ into dollars at the exchange of last week. If 1£ = 1.6729$ then:

100£ * [1.6729 ($/£)] = 167.29 $

Today the exchange is 1$ = 0.5926£, therefore:

167.29 $ * 0.5926 £/$ = 99.13£

Then the profit or loss is calculated by difference between the amount of pounds today and last week:

99.13£-100£ = - 0.87£

You have a loss of 0.87£