Assume you are in India and borrowed 800,000 Rs from one of your friends who lives in Australia. Suppose the spot exchange rate at the time borrowing was Rs63/$ and you promised to repay the loan after six months with a forward currency rate of Rs68/$ without any interest. Required: b) If you are planning to settle the loan amount in dollars (the amount calculated in a.), what is the amount of money in rupees (Rs) that you need to pay to an authorised currency exchanger in India after six months with a Rs 500 administration fee?
Assume you are in India and borrowed 800,000 Rs from one of your friends who lives in Australia. Suppose the spot exchange rate at the time borrowing was Rs63/$ and you promised to repay the loan after six months with a forward currency rate of Rs68/$ without any interest. Required: b) If you are planning to settle the loan amount in dollars (the amount calculated in a.), what is the amount of money in rupees (Rs) that you need to pay to an authorised currency exchanger in India after six months with a Rs 500 administration fee?
Chapter20: Short-term Financing
Section: Chapter Questions
Problem 3IEE
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Assume you are in India and borrowed 800,000 Rs from one of your friends who lives in Australia. Suppose the spot exchange rate at the time borrowing was Rs63/$ and you promised to repay the loan after six months with a forward currency rate of Rs68/$ without any interest.
Required:
b) If you are planning to settle the loan amount in dollars (the amount calculated in a.), what is the amount of money in rupees (Rs) that you need to pay to an authorised currency exchanger in India after six months with a Rs 500 administration fee?
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