Can you please help me with this question? I keep getting 27.996... but there's no such answer. I guess I don't know how transactions work.

Question

In 1990, the exchange rate of Mexican pesos was 3120 per U.S. dollar. The next year, the Mexican government issued a super peso which traded at three to the U.S dollar. Those who still possessed the old pesos could exchange them for super pesos or dollars, but a 4.8% transaction fee would be charged. How many U.S. dollars could be exchanged for 91754 old pesos (round your answer to the nearest penny)?

1. $17,43
2. $28,06
3. $29,14
4. $37,43

Answer 1

So, I got the same answer buuuuut then figured out we're doing it wrong.

Let's say we are charged 4.8% tax. That's added to the cost for a total of 104.8% of the price tag, not 95.2% of the price tag. Let's say we were exchanging 100 pesos. A 4.8% fee would mean we'd be exchanging 104.8 pesos and not 95.2.

If the exchange rate was 3120/$, the fee makes it 3120(1.048)/$

91754 ÷ (3120(1.048)) = $28.06