- This topic has 3 replies, 2 voices, and was last updated 11 years ago by
.
- Posts
Please i have difficulties on getting the exchange rates used to borrow, convert n invest the the expected amount due to be received or paid.
The interest rates themselves should not be too much of a problem. They are given in the question always, but because they are given as annual rates they need adjusting for the period of borrowing or investing. So (for example) if the period is 3 months, then you take 3/12 of the annual rate.
The lower rate is the rate to use when investing and the higher rate is the rate to use when borrowing.However, it seems as though you have problems with the whole idea. It is not possible to type out here the whole procedure, but if you watch my free lectures on here (both for P4 and for F9 (because it is also in the syllabus for F9)) then there I do go through explaining the idea step-by-step.
- You must be logged in to reply to this topic.