Exchange Rates (Cambridge (CIE) IGCSE Maths): Revision Note
Exam code: 0580 & 0980
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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)
Examiner Tips and Tricks
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
60.97 Australian Dollars
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