Question

Assume you plan to travel to the Southern Hemisphere after final exams. You’ve narrowed your choices down to two that you like equally: Colombia or Australia. The total cost of your trip to Australia will be 5,000 Australian Dollars. The total cost of your trip to Colombia will be 5,000,000 Colombian Pesos. Based on the November 1, 2019 exchange rates, which trip is priced less in terms of U.S. Dollars? Show your work.

Answer 1

Answer:

The trip to Colombia is priced less at $1,497.07.

Explanation:

Using the following spot inter-bank market on November 1, 2019,

1 USD = 3339.85 COP  (Colombian Pesos) and

1 USD = 1.4455 AUD (Australian Dollars

5,000 Australian Dollars on that day would be equivalent to

= $\frac{5000}{1.4455}$

= $3,459.01

5,000,000 Colombian Pesos on that day would be equivalent to

= $\frac{5000000}{3339.85}$

= $1,497.07

Considering the U.S Dollars equivalent of both cost, the trip to Colombia is priced less at $1,497.07.