Exchange Rates

Exchange rates are used when comparing and converting between different currencies. A good understanding of ratio and proportion is helpful for exchange rate conversion questions.

How do I simplify exchange rate questions?

Using ratios is one of the easiest ways to compare, convert and simplify exchange rates
- STEP 1
  Put exchange rates in ratio form (use more than one line if necessary)
- STEP 2
  Add lines for prices/costs
- STEP 3
  Use scale factors to complete lines
- STEP 4
  Pick out the answer

Worked example

€1 (1 Euro) is worth $19.51 (Mexican Pesos).
₿1 (1 Bitcoin) is worth €20004.96 (Euro).

A vintage car costs $1000000 (Mexican Pesos).

What is the cost of the car in Bitcoin?

Convert $1000000 Mexican Peso to Euros.

Put the exchange rates in ratio form.

Euro : Mexican Peso = 1 : 19.51

Add a line for each rate.

Euro : Mexican Peso
$\begin{array}{rcl} 1 : 19.51 \\ x : 1000000 \end{array}$

Convert $1000000 Mexican Peso to Euros by dividing 1000000 by 19.51.

1000000 ÷ 19.51 = 51255.7662....

So $1000000 Mexican Peso = €51255.7662... Euro.

Convert €51255.7662... Euro to Bitcoin.

Put the exchange rates in ratio form.

Bitcoin : Euro = 1 : 20004.96

Add a line for each rate.

Bitcoin : Euro
$1 : 20004.96 y : 51255.7662 . . . .$

Convert €51255.7662... Euro to Bitcoin by dividing 51255.7662... by 20004.96.

51255.7662... ÷ 20004.96 = 2.56215... Bitcoin

Round to a suitable degree of accuracy.

₿2.56 Bitcoin

Exchange Rates (CIE IGCSE Maths: Extended)

Revision Note

Exchange Rates

How do I simplify exchange rate questions?

Worked example

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Author: Amber