Exchange rates considering inflation levels

CFA Level I
#1

If a currency appreciates by 7.5% and CPI falls by 4%, why is it that a resultant exchange rate change will be a FUNCTION of 1.075 and 0.96 rather than a SUM of 7.5 and -4%?

Thanks,

FXG

#2

As with all combinations of interest rates, exchange rates and inflation compound.

#3

Thanks again magician. Whats the mathematical logic to this? Instinctively I would see these as simply additive/offsetting?

E.g. If at T=0, one unit of my currency buys me one apple, and at T=1, my currency has appreciated 7.5% and the price of an apple has fallen 4%, then I can buy 7.5% + 4% (11.5%) more apple?

As I write this I realise I’m coming up with a different answer to my original. Tying myself in knots!