The U.S. imports Japanese cars with a domestic price of 5,000,000 yen

The U.S. imports Japanese cars with a domestic price of 5,000,000 yen and the yen/dollar exchange rate is 120 on January 1, 2003. On January 1, 2004 the yen/dollar exchange rate is 125.

What is the dollar price of the cars on January 1, 2003? What is the dollar price of the cars on January 1, 2004?

ANSWER

January 1, 2003: 5,000,000 yen/120 yen/dollar = $41,666.67

January 1, 2004: 5,000,000 yen/125 yen/dollar = $40,000.00