Assume Jelly Corporation, a U.S. based MNC, obtains a one year loan of 1,500,000 Malaysian ringgit (MYR) at an interest rate of 7% to convert to the U.S. dollars. At the time the loan is received, the spot rate of the ringgit is $0.2500. Assume the spot rate of the ringgit in one year is $0.2800.

(a) Calculate the effective financing rate (expressed your answer in a percentage, e.g. 10.83%). Show the formula used and the details of your calculations.

(b) Calculate the dollar amount needed to repay the loan in one year. Show the details of your calculations.