Question

Renminbi Revaluation. Many experts believe that the Chinese currency should not only be revalued against the U.S. dollar as it was in July​ 2005, but also be revalued by 20 or 30%. What would be the new exchange rate value if the yuan was revalued an additional 20 or 30 from its initial​ post-revaluation rate of yuan 8.13 ​? The revalued exchange rate will be Yuan nothing​/$. ​(Round to two decimal​ places.)

Answer 1

Initial exchange rate = 8.13 Yuan/$

So, 8.13 Yuan = 1 $

1. If the Chinese currency is revalued by 20%:

In this case, we will get 20% more Dollars for 1 Yuan. Value of Yuan will increase

Simplifying, we get

6.78 Yuan = 1 $

So, revalued exchange rate will be 6.78 Yuan/$

2. If the Chinese currency is revalued by 30%:

6.25 Yuan = 1 $

So, revalued exchange rate will be 6.25 Yuan/$