Question

Theresa Nunn is planning a? 30-day vacation on Pulau? Penang, Malaysia, one year from now. The present charge for a luxury suite plus meals in Malaysian ringgit? (RM) is RM1 comma 040?/day. The Malaysian ringgit presently trades at RM3.1350?/$. She determines that the dollar cost today for a? 30-day stay would be ?$9 comma 952.15. The hotel informs her that any increase in its room charges will be limited to any increase in the Malaysian cost of living. Malaysian inflation is expected to be 2.7025?% ?annum, while U.S. inflation is expected to be 1.295?%. a. How many dollars might Theresa expect to need one year hence to pay for her? 30-day vacation? b. By what percent will the dollar cost have gone? up? Why?

Answer 1