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Georg Clever, who lives in Chicago, received an offer in the main to invest $5000 in a Mexican bank savings account which pays 25% annual

  1. Georg Clever, who lives in Chicago, received an offer in the main to invest $5000 in a Mexican bank savings account which pays 25% annual interest in pesos. The account permits no withdrawals for 4 years and is guaranteed by the Mexican government. At current exchange rates, $5000 will exchange into 15 million Mexican pesos. If George invests the money today, how many pesos would he receive 4 years from now? Do you see any exchange rate problems with this opportunity?

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