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Currency Exchange

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Currency Exchange

by jcnissi » Sun Jun 13, 2010 9:18 pm
Before leaving on a trip, Ms. Rodes exchanged 500 US dollars for German marks at an exchange rate of 1.55 marks per dollar. When the trip was canceled, she exchanged the total amount of marks for dollars at an exchange rate of 0.60 dollar per mark. What was the total amount, in dollars, that she lost through the two exchanges?

a. $20
b. $30
c. $35
d. $45
e. $55

How is the answer C?
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by Rahul@gurome » Sun Jun 13, 2010 9:38 pm
Initial exchange rate was 1.55 marks per dollar.
So for 500 dollars Ms. Rodes is getting 500*1.55 marks.
When the trip is canceled exchange rate is 0.6 dollars per mark.
So for 500*1.55 marks, she gets 500*1.55*0.6 dollars.
Hence the loss she suffered is 500 - 500*1.55*0.6 dollars
which is 500*(1 - 1.55*0.6) = 500*(1 - 0.93) = 500*(0.07) = 35 dollars.

The correct answer is c.
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