An investor places a sum of R100 000 in a US dollar denominated overseas fixed interest investment earning 6% p.a. compound for a one-year, and "repatriates" the investment with the interest at the end of the year.



During the year period, the value of the Rand depreciates from R7, 01 per Dollar to R7,29 per Dollar. Indicate whether this investment proves to be a better one than leaving the R100 000 in a local savings account earning 3% per annum, drawing on relevant calculations to support your argument.