If exchange rate at the end of 2006–07 is Rs 43.91/US $ and if the rate of inflation in India and USA during 2007–08 is respectively 7% and 4%. Find: (i) inflation rate differential between the two...

If exchange rate at the end of 2006–07 is Rs 43.91/US $ and if the rate of inflation in India and USA during 2007–08 is respectively 7% and 4%. Find:

(i) inflation rate differential between the two countries, and

(ii) the exchange rate at the end of 2007–08.