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Homework answers / question archive / The following data are? given: Et? = yen105 ?= $1
The following data are? given: Et? = yen105 ?= $1.00 Et?+1? = yen120 ?= $1.00 ?(one year? later) iJapan? = 12?% annually iU.S.? = 15?% annually Calculate the future value of? $1,000 in one year invested in the United States and Japan. If invested in the United?States, the future value is ?$___
Please show how to solve. Thanks!
If Invested in United States FV = 1000(1+i) = 1000*1.15 = $1150
If Invested in Japan initially Exchange rate is 105
Therefore $1000 = 105000 Yen
After 1 year
105,000(1+I) = 105000*1.12 = 117600
According to current interest rate
117600 yen = 117600/120 = $980
Therefore future value if invested in Japan = $980
