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Can someone explain to me where the 850 came fromThe U.S. investm.pdf

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Can someone explain to me where the 850 came from? The U.S. investment is denominated in dollars; pays 3 percent (i) The German investment in euros; pays 2 percent (i*) In one year, $1,000 invested in US will pay $1,000 x (1+0.03), or $1,030 The return on German CD depends on the fixed interest rate and exchange rate a year from now Solution 850 is equal to 1030/1.2 When US$ is converted to Euros..

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Can someone explain to me where the 850 came from? The U.S. investment is denominated in dollars; pays 3 percent (i) The German investment in euros; pays 2 percent (i*) In one year, $1,000 invested in US will pay $1,000 x (1+0.03), or $1,030 The return on German CD depends on the fixed interest rate and exchange rate a year from now Solution 850 is equal to 1030/1.2 When US$ is converted to Euros.

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  • 1. Can someone explain to me where the 850 came from? The U.S. investment is denominated in dollars; pays 3 percent (i) The German investment in euros; pays 2 percent (i*) In one year, $1,000 invested in US will pay $1,000 x (1+0.03), or $1,030 The return on German CD depends on the fixed interest rate and exchange rate a year from now Solution 850 is equal to 1030/1.2 When US$ is converted to Euros.