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Foreign ExchangeTraders often buy foreign currency in hope of making money when the currency’s value changes.

For example, on March 22, 2011, one U.S. dollar could purchase 0.7045 Euros, and one Euro could purchase 114.9278 yen. Let fxrepresent the number of Euros you can buy with xdollars, and let gxrepresent the number of yen you can buy with xEuros.

(a) Find a function that relates dollars to Euros.

(b) Find a function that relates Euros to yen.

(c) Use the results of parts (a) and (b) to find a function that relates dollars to yen. That is, find g∘fx=gfx

(d) What is gf1000? Interpret this result.

Short Answer

Expert verified

(a)fx=0.7045x

(b)gx=114.9278x

(c)g∘fx=80.9666351x

(d)80966.64

Step by step solution

01

Step 1. Given Information

On March 22, 2011, one U.S. dollar could purchase 0.7045 Euros, and one Euro could purchase 114.9278yen. Let fxrepresent the number of Euros you can buy with xdollars, and let gxrepresent the number of yen you can buy with xEuros.

02

Part (a) Step 1. Finding function that relates dollars to Euros.

Let x=amount of dollars

Let fxrepresent the number of Euros you can buy with localid="1647491295823" xdollars,

The given states that one US dollar can buy 0.7045dollars.

Thus, the function that relates dollars to Euros is fx=0.7045x

03

Part (b) Step 1. Function that relates Euros to yen.

Let x=amount in Euros

Let gxrepresent the number of Euros you can buy with localid="1647491308805">xdollars,

The given states that one Euro can buy 114.9278Yen.

Thus,gx=114.9278x

04

Part (c) Step 1.  Function that relates dollars to yen 

The function that relates dollars to yen

g∘fx=gfx=114.92780.7045x=80.9666351x

05

Part (d) Finding gf1000

gf1000=80.96663511000gf1000=80966.64

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