Question: Based solely on purchasing power parity (PPP), calculate the expected one-year inflation rate in the U.S. if the Canadian inflation rate is expected to be

Based solely on purchasing power parity (PPP), calculate the expected one-year inflation rate in the U.S. if the Canadian inflation rate is expected to be 3.5% next year and the one-year forward rate if a Canadian dollar is USD$.75/CAD$1. current exchange is usd$.74/cad$1

the answer given to this problem on this site is 38% how is the US infation rate 38% when the cdn one is 3.5????

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