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Aluminika Starsing.Ltd is one of largest aluminium producing companies in Singapore. The company borrows 800,000 from a British bank at 8.5% interest at a time

Aluminika Starsing.Ltd is one of largest aluminium producing companies in Singapore. The company borrows 800,000 from a British bank at 8.5% interest at a time when the exchange rate is SG$ 20,000/.

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Case: the duration of the loan is a year. What is the Singapore dollar(SG$) cost of this debt if the pound depreciates from SG$ 20,000/ to SG$ 19,000/ over the year? And if the pound appreciates to SG$ 22,500/ over the year?

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