Question

Suppose an Indian company borrowed 300 dollars from a foreign bank at the beginning of the year and repaid it in dollars along with the agreed interest rate of 12 percent per annum. At the time of borrowing, the exchange rate was Rs. 70 per dollar. Assuming zero inflation rate in both the countries, the real cost of borrowing will be zero if the exchange rate is Rs. per dollar at the time of repayment (rounded off to one decimal place).

Answer 1

The correct answer is :62.0