99th TFFE Math solve

10. Suppose, you want to purchase EURO 65,000 to make payment on behalf of your importer. Please calculate the buying and
selling exchange rate using the following Forex market data and also calculate the amount of BDT you have to pay for
purchasing EURO 65,000? 20
Inter bank Foreign exchange rate :
EURO 1=USD 1.0978—1.1158
USD 1 =BDT 117.5854—118.6476 (Please show your calculation).

To calculate the buying and selling exchange rates for purchasing €65,000 and the corresponding
amount in BDT, we will follow these steps using the provided foreign exchange rates.
Step 1: Calculate the Buying and Selling Rates for EURO to BDT
1. Determine the Buying and Selling Rates for USD to EURO:
o Buying rate for EURO: 1.0978 USD per EURO
o Selling rate for EURO: 1.1158 USD per EURO
2. Determine the Buying and Selling Rates for BDT to USD:
o Buying rate for USD: 117.5854 BDT per USD
o Selling rate for USD: 118.6476 BDT per USD
Step 2: Convert EURO to USD
 Buying rate for EURO:
Buying rate (EURO to USD)=1.0978 USDBuying rate (EURO to USD)=1.0978USD
 Selling rate for EURO:
Selling rate (EURO to USD)=1.1158 USDSelling rate (EURO to USD)=1.1158USD
Step 3: Calculate the Amount in BDT for Buying EURO
First, let’s calculate how much BDT is needed to buy €65,000:
1. Convert EURO to USD:
Amount in USD (buying)=65,000 EURO×1.0978 USD/EURO=71,357 USDAmount in USD (bu
ying)=65,000EURO×1.0978USD/EURO=71,357USD
2. Convert USD to BDT using the Buying rate:
Amount in BDT (buying)=71,357 USD×117.5854 BDT/USD≈8,385,050.4 BDTAmount in BDT
(buying)=71,357USD×117.5854BDT/USD≈8,385,050.4BDT
Step 4: Calculate the Selling Amount in BDT
1. Convert EURO to USD:
Amount in USD (selling)=65,000 EURO×1.1158 USD/EURO=72,528.7 USDAmount in USD (s
elling)=65,000EURO×1.1158USD/EURO=72,528.7USD
2. Convert USD to BDT using the Selling rate:
Amount in BDT (selling)=72,528.7 USD×118.6476 BDT/USD≈8,612,196.1 BDTAmount in BD
T (selling)=72,528.7USD×118.6476BDT/USD≈8,612,196.1BDT
Summary of Results
 Buying Rate (for €65,000):
o In BDT: 8,385,050.4 BDT
 Selling Rate (for €65,000):
o In BDT: 8,612,196.1 BDT

98th TFFE Math solve

10. Your exporter wants to sell a 120 day usance bill of EURO 85,000 to your bank. Calculate the buying exchange rate
using the following information. Also calculate the amount of BDT to be paid by your bank.
(a) Inter-bank exchange rate :
USD 1 EUR 0.92660.9455
USD 1-BDT 109.6508110.7510
(b) Transit period 15 days.; (c) Profit margin 0.10 per EURO.; (d) Your banks overhead charge 0-0650%.; (e) Interest rate
7% per annum.
[Assume 360 days in a year. Please show your calculation.] 4×5=20
Solution:
Method-1:
Given, USD 1= EURO 0.9266-0.9455 ( Direcr Quotation)
USD 1= BDT 109.6508- 110.7510 ( Direct Quotation)
Double Direct Quotation follow Cross exchange rate.
As USD is a foreign currency, Euro and BDT are Domestic Currencies.
Cross Exchange Rate:
Exchange rate, Euro 1= Lower rate of BDT/Higher rate of Euro
109.6508
= = BDT115.9712
0.9455
Exchange rate margin:
115.9712×135×7
Interest = =BDT 3.0442 (120+15=135 days)
36000
Profit margin =BDT 0.10
115.9712×0.0650
Overhead charge = =0.0754
100
Total Exchange margin= BDT (3.0442+0.10+0.0754) = BDT 3.2196
So, Buying Exchange rate=BDT( 115.97123.2196) =BDT 112.7516 (ans.)
The amount of BDT has to be paid, BDT (85,000×112.7516)= BDT
 95,83,886 (Ans.)

Method -2:
We can convert one direct quotation into indirect quotation.
USD 1= Euro 0.9266  0.9455
Euro 1 = USD (Bid rate must be lower value)  ( Ask/Offer rate must be higher value)
1 1
So, Euro 1 = USD 
0.9455 0.9266
= USD 1.0576  1.0792
One direct Quotation and one indirect quotation follow direct exchange rate.
Exchange rate:
Euro 1= Low value of USD × Low value of BDT
= 109.6508 × 1.0576 = BDT 115.9667
Exchange rate margin:
115.9667×135×7
Interest = =BDT 3.0441 (120+15=135 days)
36000
Profit margin =BDT 0.10
115.9667×0.0650
Overhead charge = =0.0754
100
Total Exchange margin = BDT (3.0441+0.10+0.0754) = BDT 3. 2195
So, Buying Exchange rate = BDT ( 115.96673.2195) =BDT 112.7472 (ans.)
The amount of BDT has to be paid, BDT (85,000×112.7472)
= BDT 95,83,512 (Ans.)

97th TFFE Math solve

10| (a) Your importer wants to book for a payment of 90-day LC amount of EUR 25,000.00 to your bank. Calculate the exchange rate
to deal with the import payment. How much does the importer have to pay to your bank? Please use the following information:
(i) Inter-bank exchange rate:
USD 1= BDT 109.5000-110.5000; EUR 1= USD 1.0750-1.0770
(ii) Your bank's overhand charge 0.0831%; (iii) Interest (or swap) cost 3.0% per annum; (iv) Assume 360 days in a year
(b) Calculate the buying and selling rate of Japanese Yen (JPY) in BDT when inter-bank market exchange rates are,
USD 1= BDT 109.5000-110.5000; USD 1=JPY 145.3947-146.0000
Solve:
To calculate the exchange rate and the total payment required by the importer for a 90-day LC amount of EUR
25,000.00, follow these steps:
1. Determine the USD equivalent for EUR 25,000.00:
o Inter-bank exchange rate for EUR to USD:
 EUR 1 = USD 1.0750 (buying rate)
 EUR 1 = USD 1.0770 (selling rate)
o Use the selling rate for EUR to USD conversion:
USD=25,000×1.0770=26,925.00
2. Determine the BDT equivalent for USD 26,925.00:
o Inter-bank exchange rate for USD to BDT:
 USD 1 = BDT 109.5000 (buying rate)
 USD 1 = BDT 110.5000 (selling rate)
o Use the selling rate for USD to BDT conversion:
BDT=26,925.00×110.5000=2,975,362.50
3. Calculate the bank's overhead charge:
o Overhead charge = 0.0831%
Overhead charge=2,975,362.50×0.000831=2,474.10
 4. Calculate the interest (or swap) cost for 90 days:
o Annual interest rate = 3.0%
o Interest for 90 days:
3 90
Interest cost=2,975,362.50× × =22,315.22
100 360
5. Calculate the total amount payable by the importer:
Total payable=2,975,362.50+2,474.10+22,315.22=3,000,151.82
So, the importer has to pay a total of BDT 3,000,151.82 to your bank.
(b)
To calculate the buying and selling rate of Japanese Yen (JPY) in BDT, follow these steps:
1. Inter-bank exchange rate for USD to BDT:
o USD 1 = BDT 109.5000 (buying rate)
o USD 1 = BDT 110.5000 (selling rate)
2. Inter-bank exchange rate for USD to JPY:
o USD 1 = JPY 145.3947 (buying rate)
o USD 1 = JPY 146.0000 (selling rate)
3. Calculate the buying rate of JPY in BDT:
o Buying rate: BDT to JPY (USD 1 to JPY 146.0000 and USD 1 to BDT 109.5000)
BDT 109.5000
JPY 1= =0.7500 BDT
JPY 146.0000
4. Calculate the selling rate of JPY in BDT:
o Selling rate: BDT to JPY (USD 1 to JPY 145.3947 and USD 1 to BDT 110.5000)
BDT 110.5000
JPY 1= =0.7600 BDT
JPY 145.3947
So, the buying and selling rates of Japanese Yen (JPY) in BDT are:
 Buying rate: 0.7500 BDT
 Selling rate: 0.7600 BDT