Example of Foreign Currency Deposit
Deposit
Rate = 12%
Loan
Term = 3 Months
Amount Required=
$ 200,000
Calculate
Deposit amount today?
Solution
Rate =
12%/4 Quarter = 3%
=
200,000/ 1.03
=194,175
$
A deposit
of $ 194,175 today in foreign country will produce $ 200,000 in three months.
