Hello, I'm new here and I need some help to answer this business math question

[Rosman Zamri]

The 6-month interest rate on USD deposits was about 5% per annum on March 15, 2020. The exchange rate on that date was MYR4.20/USD. Six months (180 days) later, it was MYR4.15/USD. What was the total 6-month return in percentage to a Malaysian investor in local percentage on money deposited in a USD account?

 

[Otis]

Hello, I'm new here and I need some help …

Welcome, Rosman. Here's a link to our forum guidelines. If you're not in a math class, then please let us know. Otherwise, please tell us what you've thought about or done, so far. What has been discussed in class?

… What [is the] return in percentage to a Malaysian investor in local percentage on money…

I'm not sure that I understand. Are you trying to state the net interest rate, after subtracting interest lost at the very end due to the lowered exchange rate?

The exchange rate on that date was MYR4.20/USD

I'm thinking that factor ought to be 4.28 -- could 4.20 be a typo?

180 days after March 15th is September 11th. The factor 4.15 looks correct, for that date.

?

 

[istinkatmath]

The 6-month interest rate on USD deposits was about 5% per annum on March 15, 2020. The exchange rate on that date was MYR4.20/USD. Six months (180 days) later, it was MYR4.15/USD. What was the total 6-month return in percentage to a Malaysian investor in local percentage on money deposited in a USD account?

I believe the answer would be to convert to USD and the spot rate of 4.20/USD. then multiply that by 1+.05^(180/365) and then convert back to MYR at the future rate of 4.15/USD. Calculate the % change (future MYR/starting MYR)-1