Calculate the real dollar rate of return on a 10,000 pound sterling deposit in a London bank in a year when the interest rate on pounds is 8 percent, the dollar/pound exchange rate moves fre per pound to $1.37 per pound, and the dollar prices increase by 9 percent The real rate of return will be percent (Enter your response as a percentage rounded to one decimal place.)
Calculate the real dollar rate of return on a 10,000 pound sterling deposit in a London bank in a year when the interest rate on pounds is 8 percent, the dollar/pound exchange rate moves fre per pound to $1.37 per pound, and the dollar prices increase by 9 percent The real rate of return will be percent (Enter your response as a percentage rounded to one decimal place.)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Calculate the real dollar rate of return on a 10,000 pound sterling deposit in a London bank in a year when the interest rate on pounds is 8 percent, the dollar/pound exchange rate moves from $1.41
per pound to $1.37 per pound, and the dollar prices increase by 9 percent
The real rate of return will be percent (Enter your response as a percentage rounded to one decimal place.)
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