Question

Taylor has a painting she paid 1 million yen for while in Japan. At the time, the exchange rate was 1 dollar to 126 yen. If a friend offers $2,000 dollars for the painting would Taylor profit? Show your reasoning

Answer 1

No, Taylor would made a loss

Explanation:

Given

Cost price of the painting = 1 million yen

Convert to dollars

Since 126 yen = 1 dollars

1 million yen = x

Cross multiply

126x = 1,000,000

x = 1,000,000/126

x = $7,936.5

Hence the cost price in dollars is $7,936.5

If a friend offers $2,000 dollars for the painting would Taylor profit, the selling price would have been $2000

Profit formula = Selling price - Cost Price

Profit = 2000 - 7,936.5

Profit = -$5936.5

Since the profit is negative, this means that taylor would have made a loss of 5936.5 if sold at $2000