Answer to Question #349814 in Financial Math for Mercii

Question

An American businessman visiting London changed US$500 into English pounds when the rate of exchange was $1.75 to the pound. He spent £257 and changed the rest back into dollars when the rate of exchange was $1.55 to the pound. At each transaction the bank charged a commission of 2%. How many dollars did the man have at the end of these transactions?

Answer 1

1.An American businessman visiting London changed US$500 into English pounds when the rate of exchange was $1.75 to the pound. The bank charged a commission of 2%.

$$\dfrac{500(0.98)}{1.75}=£280$$

2. He spent £257

$$280-257=£23$$

3.  He changed the rest back into dollars when the rate of exchange was $1.55 to the pound. The bank charged a commission of 2%.

$$23(0.98)1.55=\$34.94$$

The man had $34.94 at the end of these transactions.