If a Japanese DVD player priced at 12,000 yen can be purchased for $60, the exchange rate is
a) 200 yen per dollar.
b) 20 yen per dollar.
c) 20 dollars per yen.
d) 200 dollars per yen.
e) none of the above.
The correct answer and explanation is :
To determine the exchange rate, we use the formula:
[
\text{Exchange rate} = \frac{\text{Amount in yen}}{\text{Amount in dollars}}
]
Given:
- Price of the DVD player = 12,000 yen
- Equivalent price in dollars = $60
[
\text{Exchange rate} = \frac{12,000 \text{ yen}}{60 \text{ dollars}} = 200 \text{ yen per dollar}
]
Correct Answer:
(a) 200 yen per dollar
Explanation:
The exchange rate tells us how much of one currency is needed to obtain another currency. In this case, we are determining how many Japanese yen (JPY) are equivalent to one U.S. dollar (USD).
- Understanding the Calculation:
- The DVD player costs 12,000 yen.
- In the U.S., the same product can be purchased for 60 dollars.
- To find the exchange rate, we divide 12,000 yen by 60 dollars.
- Interpreting the Result:
- The result, 200 yen per dollar, means for every 1 U.S. dollar, you would receive 200 yen in exchange.
- This follows the typical format used in exchange rate tables, where the value is given in terms of foreign currency per U.S. dollar.
- Eliminating Incorrect Answers:
- (b) 20 yen per dollar: Incorrect, because dividing 12,000 by 60 gives 200, not 20.
- (c) 20 dollars per yen: Incorrect, because the correct way to express exchange rates is how much foreign currency one U.S. dollar buys.
- (d) 200 dollars per yen: Incorrect, because it suggests 1 yen is worth 200 dollars, which is unrealistic.
- (e) None of the above: Incorrect, because (a) is correct.
Thus, the exchange rate is 200 yen per dollar.
