Question

A bank in Toronto charges 2.00% commission to buy and sell currencies. Assume that the current exchange rate is US$1 = C$1.3435.

How many Canadian dollars will you have to pay to purchase US$1,480?

Answer 1

Purchase US$1,480 at an exchange rate of US$1 = C$1.3435 with a 2.00% commission, you will need to pay a total of C$2,028.15 Canadian dollars.

Step-by-step explanation:

The student's question is regarding the computation of Canadian dollars required to purchase a specified amount of U.S. dollars considering a given exchange rate and commission charged by a bank. To purchase US$1,480 at an exchange rate of US$1 = C$1.3435, first, calculate the amount in Canadian dollars without the commission:

C$ required = 1,480 × 1.3435 = C$1,988.38

Now, include the 2.00% commission:

Commission = 2.00% of C$1,988.38 = 0.02 × 1,988.38 = C$39.77

Therefore, total Canadian dollars required to purchase US$1,480 including commission:

Total C$ required = C$1,988.38 + C$39.77 = C$2,028.15