Megahurtz International Car Rentals has rent-a-car outlets throughout the world. It keeps funds for transaction purposes in many foreign currencies. Assume that in 2015 it held 100,000 reals in Brazil worth 42,000 dollars. It earned 12 percent interest, but the real declined 20 percent against the dollar.
a. What is the value of its holdings, based on Canadian dollars, at year-end?
b. What is the value of its holdings, based on Canadian dollars, at year-end if it earned 9 percent and the real went up by 10 percent against the dollar?