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You are planning a 3 0 - day vacation on Langkawi Island, Malaysia, one year from now. The present charge for a luxury suite plus
You are planning a day vacation on Langkawi Island, Malaysia, one year from now. The present charge for a luxury suite plus meals in Malaysian ringgit RM is RMday The Malaysian ringgit presently trades at RM S Hence, today's dollar cost for a day stay would be $ The hotel has informed you that any increase in its room charges will be limited to any increase in the Malaysian cost of living. Malaysian inflation is expected to be per annum, while US inflation is expected to be only
a How many dollars might you expect to need one year hence to pay for your day vacation?
b By what percent has the dollar gone up
c When you planned the vacation a year ago your budget was made considering the exchange rate at the time Hence a cost of $ There was no money for anything extra. Now that you face a new exchange rate, if you wanted to buy a gift for your significant other for $ would you be able to afford it Assume that all other expenses are covered. Provide relevant calculations to show if you can afford the gift.
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