SmartMoney Inc. is based in a (fictitious) country Liber aria that has as its home currency the Libertarian Pound (LIP). SmartMoney’s financial manager attracted a one-year 15 million US dollar denominated loan with an interest rate of 2.5% per year exactly one year ago. At the time of loan issuance the exchange rate was 5.71 LIP/USD. The company has just repaid this loan with interest, with a current LIP/USD exchange rate of 6.18. 

Determine the annual interest rate, in terms of LIP, that SmartMoney faced.

Answer rating: 100% (QA)

To determine the annual interest rate that SmartMoney Inc faced in terms of LIP we can follow these ... View the full answer