Question

Before boarding his flight to Zurich, Switzerland, Thomas purchased CHF950 from his bank when the exchange rate was C$1 = CHF0.9666. However, Thomas had to cancel the trip. Thomas returned to the bank to convert the Swiss currency back into Canadian dollars. If the exchange rate changed to C$1 = CHF0.9825, how many Canadian dollars would Thomas have lost in these transactions? Assume the bank has a 1.25% commission on both the sale and the purchase of the funds.

Answer 1

To calculate the amount of Canadian dollars Thomas lost in these transactions, we need to consider the exchange rates and the bank's commission.

Step-by-step explanation:

To calculate the amount of Canadian dollars Thomas lost in these transactions, we need to consider the exchange rates and the bank's commission. Let's start by calculating the amount of Canadian dollars Thomas received when he converted CHF950 back into Canadian dollars using the new exchange rate of C$1 = CHF0.9825.

The amount of Canadian dollars received will be CHF950 * C$1 / CHF0.9825. Taking into account the bank's 1.25% commission, the final amount of Canadian dollars Thomas received would be (CHF950 * C$1 / CHF0.9825) * 0.9875.

To find the loss, we subtract the amount of Canadian dollars Thomas received from the original amount he bought. Taking the bank's commission into account, the total loss would be CHF950 - [(CHF950 * C$1 / CHF0.9825) * 0.9875].