Answer :
To solve this problem, let's go through each part step by step:
(a) Exchange Rs 65,096 into pound sterling:
To exchange Nepali rupees (Rs) into British Pound Sterling (£), the bank uses the 'buying rate'. The buying rate is what the bank uses to buy pounds when given Nepali rupees.
The given buying rate is Rs 157 to £1.
To find out how many pounds Mr. Gorkhe can purchase with Rs 65,096, we use the formula:
[tex]\text{Pounds} = \frac{\text{Total Rupees}}{\text{Buying Rate per Pound}}[/tex]
[tex]\text{Pounds} = \frac{65,096}{157} \approx 414.62[/tex]
Thus, Mr. Gorkhe can purchase approximately £414.62.
(b) Calculate the new exchange rate after a 10% devaluation of the Nepali currency:
If the Nepali currency is devalued by 10%, the rupee's value decreases, which means more rupees are needed to purchase one pound.
The new rates will be:
[tex]\text{New Buying Rate} = 157 + (157 \times 0.10) = 157 + 15.7 = 172.7[/tex]
[tex]\text{New Selling Rate} = 158 + (158 \times 0.10) = 158 + 15.8 = 173.8[/tex]
Therefore, the new buying rate is Rs 172.7 and the selling rate is Rs 173.8.
(c) Re-exchange pounds back into Nepali currency after devaluation:
After devaluation, we use the 'selling rate' to re-exchange pounds back into Nepali rupees.
Using the new selling rate of Rs 173.8 per pound,
[tex]\text{Rupees Received} = \text{Pounds} \times \text{New Selling Rate}[/tex]
[tex]\text{Rupees Received} = 414.62 \times 173.8 \approx 72,061.36[/tex]
Thus, Mr. Gorkhe receives approximately Rs 72,061.36.
(d) Calculate Mr. Gorkhe's profit percentage:
First, calculate the profit by subtracting the initial amount spent from the rupees received:
[tex]\text{Profit} = 72,061.36 - 65,096 = 6,965.36[/tex]
Next, calculate the profit percentage using:
[tex]\text{Profit Percentage} = \left( \frac{\text{Profit}}{\text{Initial Amount}} \right) \times 100[/tex]
[tex]\text{Profit Percentage} = \left( \frac{6,965.36}{65,096} \right) \times 100 \approx 10.7\%[/tex]
Therefore, Mr. Gorkhe's profit percentage from these currency exchanges is approximately 10.7%.