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14 July, 02:34

In the United States, a three-pound can of coffee costs about $5. If the exchange rate is 0.8 euros per dollar and a three-pound can of coffee in Belgium costs 7 euros. What is the real exchange rate?

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  1. 14 July, 06:10
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    1 euro = $1.25

    Explanation:

    if 3Ib of coffee cost $5

    while exchange rate is. 8euro = $1

    therefore 3Ib coffee in euro will be. 8 * 5 = 4euros

    and 3Ib coffee cost 7euros

    while exchange rate is. 8euro = $1

    therefore 3Ib coffee in dollar will be 7 * 1 /.8 = $8.75

    now 7euro = $8.75

    4 euros will be equal to 4 * 8.75 / 7 = $5

    so if 7 euros = $8.75 and

    4 euros = $5

    therefore 1 euro will be 1 * 5 / 4 = $1.25
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