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Foreign Currency

Foreign Currency

Foreign currency involves changing money from one currency to another using an exchange rate. The exchange rate determines how much of one currency is worth compared to another.

The exchange rate works as a multiplier in one direction, and as a divisor in the other.

build a small table: place the conversion rate on the first line; then put the amount to be converted in the correct column on the second line. Then carry out either a multiplication or a division. Check which it should be by confirming whether you should get more of the currency, or less.

Note: Currencies all have a three-figure code: the pound has a code of GBP; the Euro has a code of EUR and the American dollar is USD.

Example 1

Convert £150 (GBP) into Singapore Dollars (SGD). The exchange rate is 1 GBP = 2.06 SGD.

1 x 2.06
150 ?

150 x 2.06 = 309.00

Answer: 309 SGD

Example 2

William changed £200 into Euros for his holiday. He has 45 Euros left. If the exchange rate is 1 GBP = 1.38 EUR, how much, in pounds sterling, did he spend on holiday?

Pounds --> Euros
1 x 1.38
? 45.00

The conversion is going the other way, so the calculation is 45 ÷ 1.38 = 32.61.

He started with £200, so he spent £200 - £32.61

Answer: £167.39

See also Relating Ratios and Functions