Question

Now that the exchange rate has changed, how many US dollars does the equipment cost?

Assume that 1.00 British Pound = $1.77 US and that on 02 October you agree to purchase a piece of equipment manufactured in the UK and pay for it 45 days later. The equipment cost 45,000 British Pounds. 45 days later, when you are ready to wire the funds to England, the exchange rate has changed. 1.00 British Pond = $1.83 US.

Answer 1

Equipment cost on the 2nd of October = 45,000 British Pound * 1.77 USD/British Pound

Equipment cost on the 2nd of October = $79,650

Equipment cost 45 days later = 45,000 British Pound * 1.83 USD/British Pound

Equipment cost 45 days later = $82,350.

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