Angela's aunt put aside $15,000 for her MBA graduation present on March 31, 2001. As an incentive, the aunt invested the funds in Italy, Australia, and China at 3% per year. The funds were divided equally with $5,000 converted to each local currency on March 31, 2001. When Angela graduates in May 2012, her aunt will allow her to use the funds in each country for a vacation. What is the U S dollar equivalent of the money today?

Question

Angela's aunt put aside $15,000 for her MBA graduation present on March 31, 2001. As an incentive, the aunt invested the funds in Italy, Australia, and China at 3% per year. The funds were divided equally with $5,000 converted to each local currency on March 31, 2001. When Angela graduates in May 2012, her aunt will allow her to use the funds in each country for a vacation. What is the U S dollar equivalent of the money today?

Answer 1

To calculate the U.S. dollar equivalent of the money today, we need to determine the value of the investments in each country and convert them back to U.S. dollars based on the exchange rates.

Let's break it down step by step:

1. Calculate the value of the investments in each country as of today:
- Italy: The investment amount of $5,000 has been growing at a 3% annual rate for 11 years (from 2001 to 2012). To calculate the value today, we can use the formula for compound interest:
Final Value = Initial Value * (1 + interest rate)^number of years
Plugging in the values, we get:
Italy Value = $5,000 * (1 + 0.03)^11
- Australia: The same formula can be used here, with the same interest rate and number of years.
Australia Value = $5,000 * (1 + 0.03)^11
- China: Again, using the same formula:
China Value = $5,000 * (1 + 0.03)^11

2. Convert the values in each country to U.S. dollars based on the exchange rates:
- Let's assume the exchange rates are as follows:
Italy: 1 U.S. dollar = 0.8 euros
Australia: 1 U.S. dollar = 1.5 Australian dollars
China: 1 U.S. dollar = 6.5 Chinese yuan
- To convert the values, we need to multiply the value in each country by the respective exchange rate.

3. Calculate the total U.S. dollar equivalent:
- Add up the converted values of each country to get the total U.S. dollar equivalent.

Please note that I cannot provide the exact U.S. dollar equivalent without the specific exchange rates as of today. You can find the current exchange rates for euros, Australian dollars, and Chinese yuan, and then use this information to calculate the U.S. dollar equivalent as explained above.