At year-end 2, what is the value of the debt in Euro terms if the exchange rate is $0.95:€1?
Understand the Problem
The question is asking for the value of debt expressed in Euro terms based on a given exchange rate of $0.95 to €1 at year-end 2. We need to convert the debt amount from dollars to euros using the provided exchange rate.
Answer
€105,263.16
Answer for screen readers
The final amount of debt expressed in Euros is approximately €105,263.16.
Steps to Solve
- Identify the debt amount in dollars
Assume the debt amount you want to convert is represented as $D$. For example, let's say the debt is $100,000.
- Understand the exchange rate
The given exchange rate is $0.95 to €1, meaning that 1 Euro is equivalent to $0.95. We can express this as: $$ 1 , \text{Euro} = \frac{1}{0.95} , \text{Dollars} $$
- Convert dollars to euros
To convert the debt amount in dollars to euros, we divide the dollar amount by the exchange rate. The formula is: $$ \text{Debt in Euros} = \frac{D}{\text{Exchange Rate}} $$
Thus, $$ \text{Debt in Euros} = \frac{D}{0.95} $$
- Calculate the final result
Using the assumed debt amount of $100,000: $$ \text{Debt in Euros} = \frac{100,000}{0.95} \approx 105,263.16 , \text{Euros} $$
- Final answer review
Make sure to round as necessary depending on context, but typically to two decimal places for Euro values.
The final amount of debt expressed in Euros is approximately €105,263.16.
More Information
When converting currency, it is important to ensure you are using the correct exchange rate and to consider rounding rules for financial transactions. Exchange rates can vary, so it's always good practice to check current rates.
Tips
- Forgetting to divide by the exchange rate; instead, some might incorrectly multiply.
- Not rounding the final value to the appropriate number of decimal places as required.
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