Do u agree with me?!!

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion


plz see this file:

http://www.aat.org.uk/servlet/file/PEV - answers.pdf?ITEM_ENT_ID=13695&ITEM_VERSION=1&COLLSPEC_ENT_ID=34

it's the Answers of PEV December 2005 Exam

I solved Task 1.2 (a) (i), which is about the decrease in value of dollar. i had another solution and it doesnt give 5%, it's less than 5%.

does anybody agree with me??

thanx 4 all

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    Yes

    The question is not what was the % increase in the value of £1?

    My answer is available by email

    sandy.hood@chichester.ac.uk


    Please don't get worked up over the difference. But for the record I do agree with you (or with u - if you prefer the abbreviation).
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!



    thanks 4 ur response..

    i have about 3 answers all of them end up with a percentage of about 4.7619%

    and i agree with u, 5% is the increase in the value of pound in relation to the dollar, not as the question was asking for

    i'll e-mail u to see ur answer :)

    btw, of course i'd prefer abbreviation!!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    I am pleased that there are others out there who agree with me. I am not usually so arrogant that I believe I am right and the examiner is wrong but I still can't agree that the answer is 5%!

    The question asks you to calculate the percentage decrease in the value of the dollar which I believe is 4.76%. Yet the answer shows you the 5% increase in the number of dollars you can buy for £1, which is not what was asked.

    I thankfully passed but I was shocked when the answers were published.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    Its badly worded and I didnt think this sort thing was covered on the AAT.

    A decrease in the value of the of dollar means that it has actually risen in exchange rate terms. If the question had said:

    "Calculate the percentage INCREASE in the value of the dollar..." this would of meant that you could more pounds for your dollars which you can't, you are getting less.

    I hate foreign exchange stuff! But I think the answer of exactly 5% might be correct (still erring though).
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    This is how i read it.

    ai)Calculate the percentage decrease in the value of the dollar between july and november.

    Originally it was $1.80 to £1. They then spent £110565 at a cost of £58500. So 110565/58500= 1.89.

    That means the value of the dollar is now $1.89 to £1. Which means for your one pound you can get more dollars therefore meaning the value of the dollar had reduced.

    The percentage decrease was then 1.89-1.8/1.8*100 = 5%. So the dollar value has potentially decreased by 5% even though the dollar 'figure' has increased by 09.

    I am rubbish at explaining things like this. But I think that the question was worded right.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    Hiya

    I disagree as I feel that you have found the value of sterling in dollars rather than the value of the dollar.

    Surely if you are finding the value of 'the dollar' you should find how much one dollar is worth in sterling not how many dollars you can get for your sterling.

    I think that they wanted to ask the question in a way that the answer was 5% but they worded it slightly wrong.

    I'm not an expert in accounts but my maths has always been good. :D

    Oh well, it doesn't matter now and I have tax to worry about in June.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    agreed
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    Hi all

    The moderator for PEV has provided a response:

    "Interested to read your note re the query from the student on Task 1.2(a).
    I'm not sure how he/she has arrived at an
    answer at 4.7619%. I would really need to see workings to explain where they are going wrong.

    The answer given is correct and shows the order it should be worked through. You first need to work out the actual dollar exchange rate of $1.89 using the actual November figures given and then take this figure and set it against the July rate of $1.80 to work out the decrease in the value of the dollar. The workings shown for this are standard workings when you are trying to work out a decrease (or increase) from one period to another.

    The answer is clear and doesn't need changing.

    Hope this helps!"

    Paul Bowen
    Deputy Exams Manager
    AAT
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    Sorry to drag this on - I know the question is only a very small part of the paper - but I still disagree with the examiner's answer.

    The figures of $1.80 and $1.89 show the value of the pound, not the value of the dollar, so 5% represents the increase in the value of the £, NOT the decrease in dollar value.

    Whilst there is a short cut, the best way to show this is to convert £1 = $1.80 to $1 = 1/1.8 = £0.56, and convert £1 = £1.89 to $1 = 1/1.89 = £0.53.

    Then you can see that the value of one dollar has fallen from £0.5556 to £0.5291, and .0265/.5556 x 100 is 4.77%.

    Obviously rounding plays a part, but I think this is the answer to the question asked!

    I'd welcome any comments from the examiner or moderator.

    Andrew Harrington
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!


    i totally agree with u..

    i received an e-mail in response to my question from AAT, and they insist that their answer is correct

    however, i still insist that the 5% is the percentage of increase in the pound value, not the percentage of the decrease in the dollar value which was asked for in the task

    thank u all 4 ur response, and good luck every 1

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    RIGHT THE DEFINITIVE REASON WHY THE ANSWER IN THE BOOK IS CORRECT!

    1. A decrease in the value of the dollar means it costs more dollars to buy a pound.

    2. The information states that the exchange rate was originally $1.80 = £1.00

    3. The question states calculate the percentage decrease in the value of the dollar. So before you do anything you know that the person in the USA is having to pay more dollars to get a pound.

    4. Lets see:

    $110,565 / £58,500 = 1.89 dollars for for every pound.

    5. Thus you are indeed having to spend more dollars to buy a pound, and the value of the dollar has decreased.

    6. This is the tricky part. Because a dollars value decreases when you have to spend more dollars to buy a pound, when you are measuring the percentage decrease in the value of the dollar you are measuring it going from $1.80 to $1.89. NOT the other way around. You might have to think hard for this to sink in, im still having to concentrate just typing this.

    7. You can see the calculation the way the AAT answer book has done it but a simple way of looking at it is

    $1.80 * 1.05 = $1.89 - a decrease in the value of the dollar of 5%.

    Hope this helps
    Adrian

    PS Please say if you disagree!
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    Please don't dwell on this small part of one exam, but I have some points

    Adrian
    How much was a dollar worth to start with?
    How much was it worth at the end?

    A dollar wasn't worth $1.80 or $1.89 at any time

    It started off being worth $1 = £0.555555555
    and it became worth $1 = £0.5291

    It fell in value by 2.65 pence from a value of 55.55pence

    = -4.67%

    We are not looking at how much the value of £1 increased

    I don't think it is an issue, just a fact. And bear in mind that there is a lot more that candidates should be looking at to pass this exam.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    What are you trying to say Sandy?

    What part of what i've put do you disagree with?

    The dollar was worth $1.80 in relation to the pound
    Obviously I havent written in relation to the pound every single time.

    You should be certain of what your saying before advising students that the AAT is incorrect.

    And what on Earth is this supposed to mean?

    "I don't think it is an issue, just a fact. And bear in mind that there is a lot more that candidates should be looking at to pass this exam. "


    At what point did I say this:

    "We are not looking at how much the value of £1 increased "

    ????????????????????????

    Please read my post again, particuarly the part i've underlined as i'm not sure you've grasped that concept yet?
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    I am sorry but you have shown how the value of the pound changed in relation to dollars not how the value of the dollar changed in relation to sterling.

    That is the point we are making.

    The value of the dollar can't be measured in dollars, it should be how much one dollar is worth.

    How can the dollar be worth one dollar and eighty cents as one dollar and eighty cents will always be worth one dollar and eighty cents?

    I guess this isn't going to resolved though and as long as no-one failed because of it we should not get to caught up in arguing each side. There are always the next exams to worry about :D
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    Adrian
    I note the content of your reply although the choice of language has surprised me.

    Let me address each of your questions
      I agree with your opening line
    (1. A decrease in the value of the dollar means it costs more dollars to buy a pound.)
      But the pound was worth $1.80 So the dollar was worth £0.56
      I disagree with your approach to the change
      When you look at the rate of change you quite rightly divide the difference by the original value
      But when you look at the original value of $1 you will get a different value from the original value of £1
      You asked about what I meant by "
    I don't think it is an issue, just a fact. And bear in mind that there is a lot more that candidates should be looking at to pass this exam. " this means that the slight differences between what your denominator is in a calculation can be taken out of all proportion to the calculation.
      I am sure that the examiner looking at both approaches will be satisfied that the candidate understands what is going on
      I think you understand the key point
      I happen to think that the person who started this thread is more precise
      I said that we are not looking at how much the £1 increased

    To try to explain the difference
    Look at the following facts that I beleive we agree
      at the start £0.56 = $1 AND $1.80 = £1
      At the end £0.53 = $1 AND $1.89 = £1
      The cost of buying £1 had increased by $0.09
      The buying power of $1 had fallen by £0.03

    Now if you look at the buying power of $1 in the way I have taken this has fallen by £0.03 or £0.03/£0.56.

    If you look at the cost of buying £1 it has risen by $0.09 (which you quite rightly say means the $ has fallen in value) $0.09/$1.80

    But where I do not agree is that the % rise in the value of £1 is the same as the % fall in the value of $1.

    I hope that makes sense and you can choose to either agree or disagree.

    I don't think I have ever been rude or insulting to you. If anything I have written has offended you I apologise. I suspect we may reach a point where we agree to disagree on this topic
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!

    okey doke Sandy will look later thats a very detailed response.

    I certainly think this type of question is odd to be an AAT paper, although it was years since I did AAT and the syllabus may have changed.

    Thanks
    Adrian

    PS sorry if you previous post was a bit rough, i'll try harder to be more diplomatic in future. you know how it is though trying to have a disagreement in words it can get a little tense.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Do u agree with me?!!



    I agree that it is a very minor part of the exam, this is not my point.

    My point says that we should rely on the suggested answers provided by the Chief Assessors, and I was just looking for that who can persuade me that I was wrong in answering this Task as part of my practical preparation for my first PEV sitting this June.

    I too much respect all your replies, and very happy I got response from AAT as well as Sandy and the other well known AAT Tutors.

    Good luck everybody.

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