A selected bundle of goods costs 100 in the UK, and a similar bundle costs 1,200 krona

Question:

A selected bundle of goods costs £100 in the UK, and a similar bundle costs 1,200 krona (DKR) in Denmark. People generally expect the rate of inflation to be 5 per cent in the UK and 3 per cent in Denmark.

(a) Assuming that PPP applies, what is the current exchange between GBP and DKR?

(b) Assuming that PPP will continue to hold, what spot exchange rate would you predict for 12 months hence?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...