The spot rate for the Argentine peso is $0.3600 per peso. Over the year, inflation in Argentina is 10 percent and U. S. inflation is 4 percent. If purchasing power parity holds, at year-end the exchange rate should be approximately dollars per peso.

The exchange rate should be approximately 0.340364 dollars per peso.

Explanation:

Spot rate = 1 Argentina Peso = $0.3600

Inflation in Argentina = 10 %

U.S. inflation = 4 %

Hence Expected rate =

1Peso (1.10) = $0.3600(1.04)  

Hence

1 Peso = $0.3600(1.04) / 1.10

1 Peso = 0.340364

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answer; 33,000;