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Exchange Rates (Cambridge O Level Maths)

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Amber

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Amber

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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 
table row blank blank cell 1 space colon space 19.51 end cell row blank blank cell x space colon space 1000000 end cell end table

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 space colon space 20004.96 y space colon space 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

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    Amber

    Author: Amber

    Expertise: Maths

    Amber gained a first class degree in Mathematics & Meteorology from the University of Reading before training to become a teacher. She is passionate about teaching, having spent 8 years teaching GCSE and A Level Mathematics both in the UK and internationally. Amber loves creating bright and informative resources to help students reach their potential.