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Sprayed
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04-23-2008, 12:18 AM
Post subject: Exchange Rates
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#1 (permalink)
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4-of-a-Kind
Join Date: Nov 2005
Location: GO BUCKS!
Posts: 3,057
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I have an assignment in my International Trade class. Here it is:
Quote:
Congratulations, you just won the Irish Lottery! You bought a ticket while you were on vacation in Ireland, and you just won a 1 million Euro jackpot after all taxes were taken out.
1. If the current exchange rate is US$1 equals 1.25 Euros, how much did you win in US dollars?
2. Suppose that the interest rate in Irish banks is 5% for a one year CD. In the USA, the rate is 2% for a one year CD. If you left your winnings in Ireland, how many Euros would you have in a year? If you had taken your winnings back to the USA, how many dollars would you have?
3. Suppose when you cashed in your CD in Ireland a year from now, the exchange rate had changed from US$1 to 1.25 Euro, to US$1 to 1.30 Euro. How much would your Irish bank account be worth in US$ at that point? Did you do better off leaving your winnings in Ireland or bringing them home to the USA?
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Here are my calcs:
Irish Lottery Winnings: €1,000,000
US $1
Euro €1.25
Exchange Rate = $.80
US Winnings = $800,000
Irish Savings Earnings after one year =
( €1,000,000*.05)+€1,000,000=€1,050,000 Converted to US = $840,000
US CD Earnings after one year = ($800,000*.02)+$800,000=$816,000
Second Part:
US: $1 Euro: €1.30 Exchange Rage is $.77
Irish Savings Earnings after one year: €1,050,00 Equals in US $807,692.31
US Winnings: $769,230.77
US CD Earning after one year: ($769,230.77*.02)+$769,230.77=$784,615.38
Sorry so long. Does this look right? Thanks
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swiggidy
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4-of-a-Kind
Join Date: Sep 2005
Location: Waiting in the shadows ...
Posts: 3,777
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You're taking classes?
/not a business guy otherwise I would try and help
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(\__/)
(='.'=)
(")_(")
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givememyleg
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WHO YA GONNA CALL?!??
Administrator
Join Date: Nov 2005
Location: ISHPERMING MISHIGEN
Posts: 5,041
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thats cool that you won a million euros, congrats
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ProZachNation
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Full House
Join Date: Aug 2005
Location: Over there!
Posts: 801
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Quote:
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Originally Posted by givememyleg
thats cool that you won a million euros, congrats
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SHIP IT! congrats GMML
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Quote:
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Originally Posted by mrhappy333
I didn't think its Bold to bang some chick with my bro. but i guess so... thats +EV in my book.
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flomo
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Full House
Join Date: Mar 2006
Location: mashing potatoes
Posts: 878
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Quote:
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Originally Posted by givememyleg
thats cool that you won a million euros, congrats
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simple is funny 
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Quote:
Originally Posted by bigred
Protect dog
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BankItDrew
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4-of-a-Kind
Join Date: Oct 2005
Location: Losing Prop Bets
Posts: 2,789
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i don't think the question is asking you to compound interest, which is what you did on your last line of the solution.
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Girlfriend: Why are the werewolves more important than living life?!
Girlfriend: Are you on the forums doing the werewolves again?
Girlfriend: Soo... you forgot to run that errand, but you had time to werewolf? Wtf?
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zxqv8
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Join Date: May 2006
Posts: 79
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i thought this was a scam thread for a minute
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ProZachNation
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Full House
Join Date: Aug 2005
Location: Over there!
Posts: 801
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Quote:
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Originally Posted by zxqv8
i thought this was a scam thread for a minute
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Jamaican switch?
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Quote:
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Originally Posted by mrhappy333
I didn't think its Bold to bang some chick with my bro. but i guess so... thats +EV in my book.
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boost
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Full House
Join Date: Mar 2005
Location: Chicago
Posts: 706
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your reply:
Im not stupid, I know I didnt win any european lottery and no I will not send any money to your nigerian bank acct so that you can get access to your fathers will who was a chief and was in possession of the ticket prior to his death. Everyone knows about your countries stupid scams, and its really pitiful that the legacy of africa will be aids and fraudulent emails. I will be forwarding this email to my local FBI office, I hope you get caught.
ofc this is the funniest when your professor is black because of the underlying racism.
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Miffed22001
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Straight Flush
Join Date: Jun 2005
Location: Marry Me Cheryl!!!
Posts: 8,181
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where do i buy a ticket for this??
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2_Thumbs_Up
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Flush
Join Date: Apr 2006
Location: Sweden
Posts: 271
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Quote:
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Originally Posted by Miffed22001
where do i buy a ticket for this??
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There are no bad beat jackpots in lotteries.
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Miffed22001
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Straight Flush
Join Date: Jun 2005
Location: Marry Me Cheryl!!!
Posts: 8,181
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Quote:
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Originally Posted by 2_Thumbs_Up
Quote:
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Originally Posted by Miffed22001
where do i buy a ticket for this??
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There are no bad beat jackpots in lotteries. |
o rly?
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