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How much australian dollar the importer will make a profit

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Problem 1: An Australian importer has received goods from China and will pay 3 million Chinese yuan (CNY) in one year. Also, the importer has the following market information and considers that the Purchasing Power Parity (PPP) does hold. How much Australian dollar the importer will make a profit or loss due to change in today's spot rate after one year according to PPP?

Australian dollar (A$)          Chinese yuan (CNY)              Spot rate

Real interest rate p.a.                   3.89%                           3.89%
Nominal interest rate p.a.              8.88%                            12.52%
Today's spot rate                        A$0.1547/CNY

Reference no: EM132676271

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