Question

Horace is seeking to exchange money in preparation for his trip to Uruguay. He will need 5,000 Uruguayan pesos, and the exchange rate between the US dollar and the Uruguayan peso is 1:19.924. The currency exchange agent Horace is using requires that a 5% surcharge be paid when converting currency. Taking the surcharge into account, how many US dollars will it take Horace to get 5,000 pesos? Round to the nearest cent.

a. $237.45
b. $249.05
c. $250.95
d. $263.50
Please select the best answer from the choices provided A B C D

Answer 1

d. $ 263.50

Step-by-step explanation:

The Exchange rate is 1 dollar = 19.924 Uruguayan Peso.

We need to buy 5000 Uruguayan pesos but the agent requires a comision of a 5% when converting currency, so really we will need to buy:

5,000 Uruguayan pesos + 5,000 Uruguayan pesos* 0.05 = 5,250 Uruguayan pesos.

Now if we apply the given exchange rate we will obtain the amount of US Dollars we need:

x U$S = (5,250 Ur.$)/(19,924 Ur.$/U$S)= 263,50 U$S needed