Jason incurred a loss of C$1,086.66 in his currency exchange transactions. This loss accounts for commissions charged by both the American and Canadian banks, taking into consideration the exchange rate during the buying and selling transactions with US dollars.
To calculate the gain or loss, we consider the buying and selling transactions, accounting for commissions and the exchange rate.
1. **Buying US Dollars in America:**
- Jason purchased US$10,000.
- The bank in America charged a 0.7% commission on the purchase.
The cost of buying US dollars is calculated as follows: Cost in USD = Amount purchased + Commission = 10,000 + (10,000 * 0.007) = 10,000 + 70 = 10,070.
2. **Selling US Dollars in Canada:**
- The exchange rate is C$1 = US$0.896.
- The bank in Canada charged a 0.26% commission on the sale.
The proceeds from selling US dollars are calculated as follows: Proceeds in CAD = (Amount sold * Exchange rate) - Commission = (10,070 * 0.896) - (10,070 * 0.0026) = 9,009.52 - 26.18 = 8,983.34.
3. **Gain or Loss Calculation:**
The gain or loss is calculated as the difference between the proceeds and the cost: Gain or Loss = Proceeds in CAD - Cost in USD = 8,983.34 - 10,070 = -1,086.66.
Therefore, Jason incurred a loss of C$1,086.66 in this currency exchange transaction.