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    Exchange Rate of Canola Oil Trade

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    Sept 2003 1.3634 C$/US$

    In September 2003, a U.S. retailer wanted to purchase canola oil from a Canadian farm. At that time in Canada, one barrel of canola oil cost C$2.00 (two Canadian dollars). Note that the U.S. retailer had U.S. dollars, so the retailer needed to exchange U.S. dollars for Canadian dollars to buy canola oil from Canada. If the businesses exchanged the canola oil at the spot exchange rate (September 2003), how much did one barrel of canola oil cost in U.S. dollars? (Round to the nearest cent.)

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    It is given that the exchange rate in September 2003 was 1.3634 C$/US$. It is also given that the cost of one barrel of canola oil ...

    Solution Summary

    This solution contains step-by-step calculations and instructions to determine how much one barrel of canola oil cost in US dollars.