One of the largest markets in the world is the currency exch

One of the largest markets in the world is the currency exchange market. Currency traders routinely move billions of dollars of investments from one currency to another to trade on the volatility of currencies relative to each other and thus make a profit. In March 2016 the weekly average exchange rates for several major currencies were as follows: 1 US dollar purchases 84.62 Japanese yen 1 US dollar purchases 1.0908 Euros 1 Euro purchases 77.58 Japanese yen 1 Euro purchases 0.625 US Dollars Now define three functions that associate these 3 major currency pairs: f(x) = Number of yen purchased with x dollars g(x) = Number of Euros purchased with x dollars h(x) = Number of Euros purchased with x yen (a) Find explicit formulas for f, g and h (noting the physically implied domain for each). (b) Evaluate h(f(1000)) and interpret this value in terms of currency.

Solution

f(1000) implies that you have 1000 dollars

now 1 dollar = 84.62 yen , so f (1000) = 84.62*1000 = 84620 yen

now h(84620 yen) = number of euros purchased with yen

so 84620/77.58 = 1090.74 euros