Use the table below to answer the following questions. Exchange Rate Quotations

You and a friend Yi are considering a summer vacation to one of two locales, Mexico or Brazil. Mexico’s currency unit is the Mexican (new) peso, and the real is used in Brazil. You live in the United States and Yi lives in China. The cost of the hotel is denominated in local currency units. You and Yi are trying to choose the locale with the lowest hotel expenses. The price of a hotel room is 200 reals per night in Brazil and 800 pesos per night in Mexico. Assume these prices remain unchanged between 2005 and 2010.        

a. Calculate the U.S. dollar price of a hotel room in Brazil and in Mexico for June 2005. Calculate these prices for 2010. Based on your answers, where would you spend your vacation in June 2005? In June 2010?

b. For June 2005 and June 2010, calculate the following:

c. Using your answers from (b) and the information in the table, calculate the Chinese yuan price of a hotel room in Brazil and in Mexico for June 2005. Calculate these prices for 2010. Based on your answers, where would Yi prefer to spend her vacation in June 2005? In June 2010?

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Currency Symbol BRL ¥ (CNY) Foreign Currency Units per Country (currency) Brazil (real) China (yuan) Mexico (peso) Data from: http://www.oanda.com. MXN U.S. Dollar June June 30, 2010 June 30, 2005 30, 2010 1.7973 6.8086 12.8355 2.3555 8.2865 10.7630