or

ask mattrab Visit www.askmattrab.com for more academic resources.

Tax and Money Exchange

Money Exchange


Q. A businessman exchanged Nepali currency Rs. 660000 into US dollar at the rate of $1= Nrs.110. After 4 days, Nepali currency is revaluated by 10% and he exchanged the dollars into Nepali currency again. What is his gain or loss?

Solution:

Here, Sum of money inNrs.=Rs.660000           

$1 =  Nrs. 110                                         

or,  Nrs.1= $ (1/110)

So, Nrs.660000= (1/110)*660000     =$ 6000

After 4 days, Nepali currency is revaluated by 10%.

So,   $1 = 110 - 10% of 110                             

or,  $1 = 110- (10/100)*110                     

  or,  $1 = Rs. 99

After revaluation, 

       $6000= Rs. 99 * 6000                           

or,  $6000= Rs. 594000

Now, 

Loss amount= Am. before revaluation -                               Am. after revaluation

                         = Rs.660000- Rs. 594000

                         = Rs. 66000


Therefore, the businessman's loss was Rs. 66000.