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Postal Express has outlets throughout the world. It also keeps funds for transactions purposes in many foreign countries. Assume in 2010 it held 240,000 reals in Brazil worth 170,000 dollars. It drew 12 percent interest, but the Brazilian real declined 24 percent against the dollar.
a) What is the value of its holdings, based on U.S. dollars, at year-end? (Hint multiply $170,000 times 1.12 and then multiply the resulting value by 76 percent.)
b) What is the value of its holdings, based on U.S. dollars, at year-end if instead it drew 9 percent interest and the real went up by 13 percent against the dollar?
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Jack and Jill Hillclimber have grown tired of going to the well to fetch water and are trying to decide if they can afford to take out a second mortgage to install indoor plumbing in their old farm house. Their farm house is worth about $150,000 and ..
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