Mr  Jesse Pinkman (A Colombian Businessman) wants to do business in Peru and interested to know the exchange rate between Colombian Peso and Peruvian Sol. However, the exchange rate between these two currencies is not available in the market but exchange rates between some other currencies are available. Last year, A Brazilian Real (BRL) was worth 720 Colombian Peso (COP). A Peruvian Sol (PEN) was exchanged for 1.45 Brazilian Real (BRL). Today, BRL has appreciated by 5% against PEN and COP appreciated by 3% against BRL. If Jesse wants to know how much Colombian Peso he is going to get today if he earns 80000 Peruvian Sol by exporting his products in Peru assuming he will convert all his earning into his home currency, what will you tell him? (Show all necessary steps and calculations)

Last year Exchange rate ,

1 BRL = 720 COP

1 PEN = 1.45 BRL.

Today, BRL has appreciated by 5% against PEN

Hence todays Exchange rate => 1 PEN = 1.45 BRL * (1-5%)

=>1 PEN = 1.45 BRL * 0.95

=>1 PEN = 1.3775 BRL[ Logic now 5% less BRL would required to purchase 1 PEN]

COP appreciated by 3% against BRL

Hence todays exchange rate =>1 BRL = 720 COP*(1-3%)

=>1 BRL = 720 COP*0.97

=>1 BRL = 698.40 COP [ Logic now 3% less COP would required to purchase 1 BRL]

Todays Exchange rate ,

1 PEN = 1.3775 BRL

and 1 BRL = 698.40 COP

Jesse  earns 80000 Peruvian Sol by exporting his products in Peru

As direct quoates are not available for PEN & COP hence Jesse would first Convert the 80000 PEN received to BRL at exchange rate 1 PEN = 1.3775 BRL.

BRL to be recived by converion = 80000 PEN * 1.3775 BRL per PEN = 110,200 BRL

Now he will convert the BRL to his home currency Colombian Peso (COP) at exchnage rate 1 BRL = 698.40 COP.

COP he will receive by Converion = 110,200 BRL * 698.40 COP per BRL = 76,963,680 COP

Jesse will receive 76,963,680 Colombian Peso (COP) today if he earns 80000 Peruvian Sol(PEN) by exporting his products in Peru assuming he will convert all his earning into his home currency