Exchange Rates Flashcards

The value of one currency compared to another, used to convert between currencies.

Amount in new currency = Amount in original currency × Exchange rate.

Multiply the amount in pounds by the exchange rate.

Divide the amount in the foreign currency by the exchange rate.

The exchange rate for converting back to the original currency (e.g., if £1 = $1.20, then $1 = £1 ÷ 1.20).

If £1 = €1.15, to convert £50 to euros: 50 × 1.15 = €57.50.

If £1 = €1.15, to convert €57.50 to pounds: 57.50 ÷ 1.15 = £50.

Always round to 2 decimal places, as currency is usually given to the nearest penny or cent.

A fee charged by a bureau de change or bank for converting currency, often a percentage of the amount exchanged.

Read the question carefully to determine whether to multiply or divide by the exchange rate, and check for any additional fees or commissions.