You invest $40,000 in Germany when the exchange rate is $1.40/€. Your investment gains 14%, and you subsequently exchange the euros back into dollars at a rate of $1.45/€. What is your total percentage return on this investment? options: 16.48% 16.89% 17.19% 17.35% 18.07%
First, let's calculate the value of your investment after gaining 14% in euros.
Investment value in euros = $40,000 * €1.40/$1 = €56,000
Next, let's calculate the value of your investment in dollars after exchanging it back.
Investment value in dollars = €56,000 * $1.45/€1 = $81,200
Now, let's calculate the percentage return on this investment.
Percentage return = (Investment value in dollars - Initial investment) / Initial investment * 100%
Percentage return = ($81,200 - $40,000) / $40,000 * 100%
Percentage return = $41,200 / $40,000 * 100%
Percentage return ≈ 103%
Therefore, your total percentage return on this investment is approximately 103%.
None of the options provided match the correct answer, so there seems to be an error in the provided options.