Question

A bank gives two dollars in eastern caribbean currency for one united states dollar. Given 1% tax is charged on all foreign exchange transactions, calculate the amount in ec currency which a tourist receives in exchange for us 1200

Answer 1

A tourist receives 2376 ec currency in exchange for us 1200.

Explanation:

This can be calculated as follows:

Tax rate = 1%

Amount of us currency = 1200

Total amount of ec currency = Amount of us currency * 2 = 1200 * 2 = 2400

Amount of tax = Total amount of ec currency * Tax rate = 2400 * 1% = 24

Net amount of ec currency = Total amount of ec currency - Amount of tax = 2400 - 24 = 2376

Net amount ec currency obtained above is the amount of ec currency which a tourist receives in exchange for us 1200.

Therefore, a tourist receives 2376 ec currency in exchange for us 1200.