Direct and Indirect Quotes

Question

165,000,000 Taiwan dollars are the equivalent of € 4,650,330. $61,200,000 is the equivalent of € 39,276,000. Provide the (1) direct quotation and the (2) indirect quotation for the currency pair
Taiwan dollars and US dollars. Round your answer to four decimal places.

Answer 1

Hi 

I will provide you with the direct quotation only and you can try to figure out the indirect one.

 

Direct Quotation:

 

Since € 4,650,330 = Taiwan dollars 165,000,000 so

 

€ 1 = Taiwan dollars ( 165000000 / 4650330 )

      = Taiwan dollars 35.4813

 

Mark the above equation as A.

 

Similarly, we calculate the value of one euro to US dollars

 

€ 39276000 = US dollars 61200000

€ 1              = US dollars (61200000 / 39276000 )

                  = US dollars 1.5582

 

Mark the above equation as B

 

Now, equating both A and B equations we get,

 

€ 1 = Taiwan dollars 35.4813 = € 1 = US dollars 1.5582

 

This gives us

 

US dollars 1.5582 = Taiwan dollars 35.4813

 

Now, to get the value of Taiwan dollars in terms of one US dollar, we divide Taiwan dollars by US dollars as done earlier to get Taiwan dollars in terms of one Euro and US dollars in terms of one Euro. 

 

US dollars 1 = Taiwan dollars ( 35.4813 / 1.5582 )

          = Taiwan dollars 22.7707

 

This is the direct quotation of US dollars and Taiwan dollars