Exchange Rates (Cambridge International IGCSE Maths)

Exchange rates

Exchange rates are used to compare and convert between different currencies.

How do I convert between currencies?

• Start by writing the exchange rate

  • £1.00 (GBP) = €1.17 (EUR)

• To convert from GBP to EUR, multiply by 1.17

  • Because 1.00 × 1.17 = 1.17

• To convert from EUR to GBP, divide by 1.17

  • Because 1.17 ÷ 1.17 = 1.00

• To find £28 in Euros

  • 28 × 1.17 = €32.76

• To find €75 in Pounds

  • 75 ÷ 1.17 = £64.10 (to the nearest penny)

Exam Hint If you can't work out whether to multiply or divide when converting currency:

• Work out the value if multiplied, and write it down
• Work out the value if divided, and write it down
• Look at the exchange rate and consider if you are expecting a bigger number than the original, or a smaller number
• Select the correct answer!

Worked Example On a particular day, the exchange rate from US Dollars to Japanese Yen is:

1 US Dollar = 155.62 Japanese Yen

and the exchange rate from Australian Dollars to Japanese Yen is:

1 Australian Dollar = 102.09 Japanese Yen

An item costs 40 US Dollars.

Find the cost of the item in Australian Dollars.

Answer:

The first exchange rate is 1 US Dollar = 155.62 Japanese Yen So to convert from US Dollars to Japanese Yen, multiply by 155.62

40 × 155.62 = 6224.80 Japanese Yen

The second exchange rate is 1 Australian Dollar = 102.09 Japanese Yen So to convert from Japanese Yen to Australian Dollars, divide by 102.09

6224.80 ÷ 102.09 = 60.9736... Australian Dollars

Round to 2 decimal places as we are dealing with money

Final answer: 60.97 Australian Dollars