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5. An Investor bought US dollars for R100000 at an exchange rate of I USS - R8,17. Seventeen months later he sells the US dollars at an exchange rate of 1 USS \( = \) R6,93. 5.1 Calculate the value of the initial investment in USS. 5.2 Calculate the amount he received in rand when he sold the dollars. 5.3 State whether the investor made a profit or a loss. 5.4 Calculate the amount of the profit or loss. Use the conversion rate 10,6 Kenyan shillings is equal to 1 South African rand to convert: 6.1 R30 into shillings 6.2 S30 shillings into rands.

Ask by Chambers Daniels. in South Africa
Feb 04,2025

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Answer

- **5.1** Initial investment in USD: **$12,239.90** - **5.2** Amount received in rand after selling: **R84,822.52** - **5.3** The investor made a **loss**. - **5.4** Amount of the loss: **R15,177.48** - **6.1** R30 is equivalent to **318 Kenyan shillings**. - **6.2** S30 is approximately equivalent to **R2.83**.

Solution

Let's break down the problem step by step. ### 5.1 Calculate the value of the initial investment in USD. The initial investment in rand is R100,000, and the exchange rate is 1 USD = R8.17. To find the value in USD, we can use the formula: \[ \text{USD} = \frac{\text{Rand}}{\text{Exchange Rate}} \] Substituting the known values: \[ \text{USD} = \frac{100000}{8.17} \] ### 5.2 Calculate the amount he received in rand when he sold the dollars. After 17 months, the exchange rate is 1 USD = R6.93. The amount received in rand can be calculated as: \[ \text{Rand Received} = \text{USD} \times \text{New Exchange Rate} \] Substituting the value of USD from the previous calculation: \[ \text{Rand Received} = \left(\frac{100000}{8.17}\right) \times 6.93 \] ### 5.3 State whether the investor made a profit or a loss. To determine if the investor made a profit or a loss, we compare the initial investment in rand (R100,000) with the amount received in rand after selling the dollars. ### 5.4 Calculate the amount of the profit or loss. The profit or loss can be calculated as: \[ \text{Profit/Loss} = \text{Rand Received} - \text{Initial Investment} \] Now, let's perform the calculations for 5.1 and 5.2 first. Calculate the value by following steps: - step0: Calculate: \(\frac{100000}{8.17}\) - step1: Convert the expressions: \(\frac{100000}{\frac{817}{100}}\) - step2: Multiply by the reciprocal: \(100000\times \frac{100}{817}\) - step3: Multiply: \(\frac{100000\times 100}{817}\) - step4: Multiply: \(\frac{10000000}{817}\) Calculate or simplify the expression \( (100000 / 8.17) * 6.93 \). Calculate the value by following steps: - step0: Calculate: \(\left(\frac{100000}{8.17}\right)\times 6.93\) - step1: Divide the numbers: \(\frac{10000000}{817}\times 6.93\) - step2: Convert the expressions: \(\frac{10000000}{817}\times \frac{693}{100}\) - step3: Multiply the numbers: \(\frac{69300000}{817}\) ### 5.1 Value of the initial investment in USD The value of the initial investment in USD is approximately: \[ \text{USD} \approx 12239.90 \] ### 5.2 Amount received in rand when he sold the dollars The amount received in rand when he sold the dollars is approximately: \[ \text{Rand Received} \approx 84822.52 \] ### 5.3 Determine if the investor made a profit or a loss Now, we compare the amount received in rand (R84,822.52) with the initial investment (R100,000): - Initial Investment: R100,000 - Amount Received: R84,822.52 Since R84,822.52 is less than R100,000, the investor made a **loss**. ### 5.4 Calculate the amount of the profit or loss The loss can be calculated as: \[ \text{Loss} = \text{Initial Investment} - \text{Rand Received} \] Substituting the values: \[ \text{Loss} = 100000 - 84822.52 \] Now, let's calculate the loss. Calculate the value by following steps: - step0: Calculate: \(100000-84822.52\) - step1: Subtract the numbers: \(15177.48\) ### 5.4 Amount of the loss The amount of the loss is approximately: \[ \text{Loss} \approx 15177.48 \] ### Summary of Results - **5.1** Value of the initial investment in USD: **$12,239.90** - **5.2** Amount received in rand when he sold the dollars: **R84,822.52** - **5.3** The investor made a **loss**. - **5.4** Amount of the loss: **R15,177.48** --- Now, let's move on to the conversion of rand to Kenyan shillings and vice versa. ### 6.1 Convert R30 into shillings Given the conversion rate of 10.6 Kenyan shillings = 1 South African rand, we can calculate: \[ \text{Shillings} = \text{Rand} \times 10.6 \] Substituting R30: \[ \text{Shillings} = 30 \times 10.6 \] ### 6.2 Convert S30 shillings into rands To convert shillings back to rand, we can use the inverse of the conversion rate: \[ \text{Rand} = \frac{\text{Shillings}}{10.6} \] Substituting S30: \[ \text{Rand} = \frac{30}{10.6} \] Let's perform these calculations. Calculate the value by following steps: - step0: Calculate: \(30\times 10.6\) - step1: Multiply the numbers: \(318\) Calculate or simplify the expression \( 30 / 10.6 \). Calculate the value by following steps: - step0: Calculate: \(\frac{30}{10.6}\) - step1: Convert the expressions: \(\frac{30}{\frac{53}{5}}\) - step2: Multiply by the reciprocal: \(30\times \frac{5}{53}\) - step3: Multiply: \(\frac{30\times 5}{53}\) - step4: Multiply: \(\frac{150}{53}\) ### 6.1 Convert R30 into shillings The conversion of R30 into Kenyan shillings is: \[ \text{Shillings} = 30 \times 10.6 = 318 \] ### 6.2 Convert S30 shillings into rands The conversion of S30 shillings back into rand is approximately: \[ \text{Rand} \approx 2.83 \] ### Summary of Conversion Results - **6.1** R30 is equivalent to **318 Kenyan shillings**. - **6.2** S30 is approximately equivalent to **R2.83**. If you have any further questions or need additional calculations, feel free to ask!

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To find the initial investment in US dollars, you can take the total rand amount of R100,000 and divide it by the exchange rate of R8.17 per US dollar. This means the investor bought approximately 12,248.65 USD (R100,000 ÷ R8.17). When selling the USD after 17 months at the exchange rate of R6.93, the investor received about R84,883.99 (12,248.65 USD × R6.93). To determine if there was a profit or loss, you compare the selling amount (R84,883.99) to the initial investment (R100,000). Unfortunately, this is a loss of R15,116.01 (R100,000 - R84,883.99). Now, let's convert between Rand and Kenyan shillings! To convert R30 into shillings, you multiply by the conversion rate, giving 318.00 Kenyan shillings (R30 × 10.6). Conversely, when converting 30 shillings back to rands, you'd divide 30 by the conversion rate, resulting in about R2.83 (30 ÷ 10.6).

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