Suppose the current exchange rate for the Polish zloty is

Suppose the current exchange rate for the Polish zloty is Z 4.04. The expected exchange rate in three years is Z 4.13. What is the difference in the annual inflation rates for the United States and Poland over this period? Assume that the anticipated rate is constant for both countries. What relationship are you relying on in answering?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...

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