Foreign Exchange

Foreign Exchange is when you change money from one type (like Euros) to another type (like US Dollars).

An exchange rate is like a rule that tells you how much one unit of money is worth in another type of money.

For example, if the exchange rate is €1 = $1.32, it means 1 Euro is worth 1.32 US Dollars.

Steps to Calculate Foreign Exchange

To convert an amount from one currency to another, follow these simple steps:

Write the Conversion
Get 1 on the Left-Hand Side
Multiply to Get the Value You Want

Write the Conversion: Start with the exchange rate, making sure the currency you want to convert to is on the right-hand side of the equation.

Get 1 on the Left-Hand Side: To make calculations easier, you want to express the exchange rate so that 1 unit of currency is on the left-hand side.

Do this by dividing both sides of the equation by the number on the left-hand side.

Multiply to Get the Value You Want: Once you have 1 unit of the currency on the left-hand side, multiply both sides by the amount you want to convert.

lightbulbExample

Example: Converting US Dollars to Euro

Let's say the exchange rate is €1 = $1.32, and you want to find out how many Euro you would get for $200.

Step 1: Write the Conversion

First, write the conversion rate so that Euro is on the right:

$\$ 1.32 = €1$

Step 2: Get 1 on the Left-Hand Side

Next, we need to express the conversion so that $1 is on the left-hand side:

$\$ 1 = \frac{€1}{1.32}$

This is done by dividing both sides of the equation by 1.32.

Step 3: Multiply Both Sides

Now that we have $1 on the left-hand side, we can multiply both sides by $200 to find out how many Euro we would get:

$\$ 200 = \frac{€1}{1.32} \times 200$

$= €151.52$

So, $200 would be converted to €151.52 at this exchange rate.

infoNote

Exam Tip: If the exchange rate tells you how much 1 unit of the other currency is worth, just multiply.

If you need to find out how much 1 unit of your currency is worth, divide first, then multiply.

infoNote

Try it out!

You have $150 and you want to know how many Euros (€) you will get if the exchange rate is €1 = $1.50.
You have €200 and you want to know how many British Pounds (£) you will get if the exchange rate is €1 = £0.85.
You have £50 and you want to know how many US Dollars ( $) you will get if the exchange rate is :highlight[£1 =$ 1.40].
You have ¥10,000 (Japanese Yen) and you want to know how many Euros (€) you will get if the exchange rate is ¥100 = €0.80.

Solutions:

You have $150 and you want to know how many Euros (€) you will get if the exchange rate is €1 = $1.50.

Steps:

Write Down the Exchange Rate:

The exchange rate is €1 = $1.50. This means 1 Euro is worth 1.50 US Dollars.

Make It Easy to Work With:

We want to know how much $1 is worth in Euros.
To do this, we divide both sides by $1.50:
$1 = €(1 ÷ 1.50)
$1 = €0.6667 (This means 1 US Dollar is worth 0.6667 Euros)

Multiply to Find Out How Much $150 Is in Euros:

Now that we know how much $1 is worth, we multiply by the amount we have, which is $150.
€ = 0.6667 × 150 = €100 So, $150 is worth €100.

You have €200 and you want to know how many British Pounds (£) you will get if the exchange rate is €1 = £0.85.

Steps:

Write Down the Exchange Rate:

The exchange rate is €1 = £0.85. This means 1 Euro is worth 0.85 Pounds.

Multiply Directly:

Since the exchange rate is already given for €1, we don't need to adjust it. We can directly multiply by the amount of Euros you have.
£ = 0.85 × 200

Calculate:

£ = £170 So, €200 is worth £170.

You have £50 **and you want to know how many US Dollars ( $) you will get if the exchange rate is** :highlight[£1 =$ 1.40].

Steps:

Write Down the Exchange Rate:

The exchange rate is £1 = $1.40. This means 1 Pound is worth 1.40 US Dollars.

Multiply Directly:

Since the exchange rate tells us how much 1 Pound is in Dollars, we multiply by the amount of Pounds you have.
$ = 1.40 × 50

Calculate:

$=$ 70 So, £50 is worth $70.

You have ¥10,000 (Japanese Yen) and you want to know how many Euros (€) you will get if the exchange rate is ¥100 = €0.80.

Steps:

Write Down the Exchange Rate:

The exchange rate is ¥100 = €0.80. This means 100 Yen is worth 0.80 Euros.

Make It Easy to Work With:

To find out how much ¥1 is worth in Euros, divide both sides by 100:
¥1 = €(0.80 ÷ 100)
¥1 = €0.008

Multiply to Find Out How Much ¥10,000 Is in Euros:

Now multiply by the amount of Yen you have:
€ = 0.008 × 10,000

Calculate:

€ = €80 So, ¥10,000 is worth €80.

Foreign Exchange Simplified Revision Notes for Junior Cycle Mathematics

Foreign Exchange

Steps to Calculate Foreign Exchange

Example: Converting US Dollars to Euro

Solutions:

Steps:

Steps:

Steps:

Steps:

500K+ Students Use These Powerful Tools to Master Foreign Exchange For their Junior Cycle Exams.

Other Revision Notes related to Foreign Exchange you should explore