Hey Chegg, I am having trouble with this problem and I could really use your help in solving it.

1) We know that the yen and the Swiss franc have a 100 yen/ sf l exchange rate, meaning one swiss franc buys 100 yen in the spot ER market. The 1 year forward rate is 108 yen /swiss franc, or 1 swiss franc buys 108 yen in the forward market. If the swiss franc has an interest rate of .11, what should the yen rate be for IPT (interest parity theory) to be attained? If the yen rate were 16%, would there be equilibrium? If so, what would transpire? Show both amounts and differentials. Also, show everything in both yen and swiss franc terms.

Below are the formulas that my professor has provided. Maybe you can use it as a guide.

Interest Rate Parity Theory: I. Equilibrium A. In Amounts

Dollar Terms ($/E):

^$P (1 + i_$) = ^$P [1 / ^$/ES] (1 + i_E) (^$/EF)

i_$ = interest rate of domestic currency

i_E = interest rate of foreign currency

^$/ES = spot exchange rate in euro

^$/EF = forward rate in dollar

Euro Terms (E/$):

^$P (1 + i_$) = ^$P (^E/$S) (1 + i_E) (1 / ^E/$F)

i_$ = interest rate of domestic currency

i_E = interest rate of foreign currency

^E/$S = spot exchange rate in euro

^E/$F = forward rate in euro

Interest Rate Parity Theory: I. Equilibrium B. In Percentages or Differentials

Dollar Terms ($/E):

i_$ - i_E / 1 + I_E = ^$/EF - ^$/ES / ^$/ES

Euro Terms (E/$):

i_$ - I_E / 1 + i_E = ^E/$S - ^E/$F / ^E/$F

I am used to solving these problems when dealing with the $ and the euro. But, now I am dealing with Japanese Yen and Swiss Franc, which are both foreign currencies. Using the formulas that I provided above in trying to show amount and percentages, which currency becomes domestic and which currency becomes foreign. This is where I am confused. Please show this problem for me using the formulas above and please show work so I can understand it clearly. I seem to be stuck.