Question

Anne Dietz at Changi​ #3 (Singapore). Anne Dietz lives in​ Singapore, but is making her first business trip to​ Sydney, Australia. Standing in​ Singapore's new terminal​ #3 at Changi​ Airport, she looks at the foreign exchange quotes posted over the FX​ trader's booth. She wishes to exchange 1,100 Singapore dollars​ (S$ or​ SGD) for Australian dollars​ (A$ or​ AUD). What Anne​ sees: Spot rate​ (SGD = 1.00​ USD) 1.3443 Spot rate​ (USD = 1.00​ AUD) 0.7646 a. What is the Singapore dollar to Australian dollar cross​ rate? b. How many Australian dollars will Anne get for her Singapore​ dollars? a. What is the Singapore dollar to Australian dollar cross​ rate? The cross rate is SGD 1.0279 1.0279​/AUD. ​(Round to four decimal​ places.) b. How many Australian dollars will Anne get for her Singapore​ dollars? Anne will get AUD nothing . ​ (Round to two decimal​ places.)

Answer 1

Answer:

a. The Singapore dollar to Australian dollar cross​ rate is (SGD = 1.00 AUD) 1.0278.

b. The number of Australian dollars Anne will get is 1,070.25 Australian dollars.

Explanation:

a. What is the Singapore dollar to Australian dollar cross​ rate?

Given:

Spot rate​ (SGD = 1.00​ USD) 1.3443

Spot rate​ (USD = 1.00​ AUD) 0.7646

These imply that:

1.3443 SGD = 1.00​ USD ..................... (1)

0.7646 USD = 1.00​ AUD ................... (2)

From equation (2), we divide through by 0.7646 to have:

0.7646 / 0.7646 USD = 1.00 / 0.7646 AUD

1.00 USD = 1.3079 AUD

Substituting this into equation (1) and solve as follows:

1.3443 SGD = 1.00​ USD = 1.3079 AUD

Dropping 1.00​ USD, we have:

1.3443 SGD = 1.3079 AUD

Dividing through by 1.3079, we have:

1.3443 / 1.3079 SGD =  1.3079 / 1.3079 AUD

1.0278 SGD =  1.00 AUD

Therefore, the Singapore dollar to Australian dollar cross​ rate is (SGD = 1.00 AUD) 1.0278.

b. How many Australian dollars will Anne get for her Singapore​ dollars?

This can be calculated as follows:

Number of Australian dollars Anne will get = Amount of Singapore dollars​ Anne wishes to exchange for Australian dollars​ / Singapore dollar to Australian dollar cross​ rate = 1,100 / 1.0278 = 1,070.24712979179 Australian dollars

Rounding to two decimal​ places as required, we have:

Number of Australian dollars Anne will get = 1,070.25 Australian dollars

Therefore, the number of Australian dollars Anne will get is 1,070.25 Australian dollars.