Converting Currencies
Assign Yourself: Data Collection due to
Ms. Griffith’s email by 11:59PM tonight, 10/9!
S
Part 1
Simple Currency Conversion
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Simple Currency Conversion:
Given Conversion Explicitly
Option 1: If you understand, multiply or divide exchange rate.
Option 2: Set up a proportion.
S Sample question 1: A
bank exchanges 1
British pound (GBP)
for 1.9 Australian
dollars (AUD).
Convert:
a. 40 GBP to AUD
b. 500 AUD to GBP
a.
1 GBP = 1.9 AUD
40 * 1.9 = 76 AUD
OR 1 = 40 , x = 76 AUD
1.9
b.
x
1 GBP = 1.9 AUD
500 / 1.9 = 263 GBP
OR 1 = x , x = 263
GBP1.9 500
Simple Currency Conversion:
Practice On Your Own
A currency exchange will convert 1 Singapore dollar (SGD) to
5.4 South African rand (ZAR). Convert:
a. 3000 SGD into ZAR
b. 21000 ZAR into SGD
Simple Currency Conversion:
Practice On Your Own
A currency exchange will convert 1 Singapore dollar (SGD) to
5.4 South African rand (ZAR). Convert:
a. 3000 SGD into ZAR
b. 21000 ZAR into SGD
3000*5.4 =16200 21000 / 5.4 = 3888.89
Try again on your own. Convert:
c. 450 SGD into ZAR
d. 1.35 ZAR into SGD
Simple Currency Conversion:
Practice On Your Own
A currency exchange will convert 1 Singapore dollar (SGD) to
5.4 South African rand (ZAR). Convert:
a. 3000 SGD into ZAR
b. 21000 ZAR into SGD
3000*5.4 =16200 21000 / 5.4 = 3888.89
Try again on your own. Convert:
c. 450 SGD into ZAR
450 *5.4 = 2430
d. 1.35 ZAR into SGD
1.35 / 5.4 = 0.25
Simple Currency Conversion:
With Table of Exchange Rates
Step 1: Choose row for original currency and column for new currency.
Step 2: Multiply.
(NOTE: If only one is given, you have to decide whether to multiply or divide.)
//////
USD
GBP
CHF
USD
1
0.625
1.03
Answers:
GBP
1.60
1
1.67
CHF
0.97
0.60
1
1) a) 0.97
b) 1.03
1. Write down exchange rate from:
a. CHF to USD
b. USD to CHF
2. Convert:
a. 3000 USD to GBP
b. 10000 francs to pounds.
2) a) 3000 * 0.625 = 1875 GBP
b) 10000 * 0.6 = 6000 GBP
Simple Currency Conversion:
With Table of Exchange Rates
The table below shows exchange rates for the US Dollar.
///////
USD
Taiwan Dollar (TWD)
31.9632
Norwegian Kroner (NOK)
5.8818
Chinese Yuan (CNY)
6.8268
1. Convert 200 USD into:
a. TWD
b. NOK
2. Convert 5000 NOK into:
a. USD
b. CNY
c. CNY
Simple Currency Conversion:
With Table of Exchange Rates
The table below shows exchange rates for the US Dollar.
///////
1 USD
Taiwan Dollar (TWD)
31.9632
Norwegian Kroner (NOK)
5.8818
Chinese Yuan (CNY)
6.8268
1. Convert 200 USD into:
a. TWD
b. NOK
2. Convert 5000 NOK into:
a. USD
b. CNY
c. CNY
Answers:
1) a) 200 * 31.9632 = 6392.64 TWD
b) 200 * 5.8818 = 1176.36 NOK
c) 200 * 6.8268 = 1365.36 CNY
2) a) 5000/5.8818 = 850.08 USD
b) 850.08 * 6.8268 = 5803.33 CNY
Trading with
Commission
First Stop: Commission via Exchange Rate
S
Commission
•
Currency traders don’t
exchange money just
because they’re nice…
•
Customers usually have to
pay for this service.
•
The commission can vary
from ½% to 3% of could be
a “flat fee.”
•
Some traders charge no
commission but offer worse
exchange rates instead.
Commission with Buy/Sell
Make sure you choose the appropriate column (BUY or SELL).
Country
Code Buys
Sells
Europe
EUR
0.6819 0.6547
U.K.
GBP
0.6064 0.5821
1.
Convert 400 USD into euros.
2.
How much does it cost in USD to
buy 5000 Yen (JPY)?
3.
How many USD can you buy for
2000 Swedish kronor?
Australia AUD 1.0883 1.0601
Canada
CAD 1.0681 1.0253
China
CNY
6.8465 6.8017
Denmark DKK 5.0593 4.8569
Japan
JPY
90.99
87.36
Norway
NOK 5.5248 5.3038
Singap.
SGD
1.4047 1.3485
S. Africa
ZAR
7.3608 7.0663
Sweden
SEK
6.8075 6.5352
Answers:
1.
400 * 0.6547 = 261.88 EUR
2.
5000/87.36 = 57.23 USD
3.
2000/6.8075 = 293.79 USD
Commission with Buy/Sell
Make sure you choose the appropriate column (BUY or SELL).
Country
Code Buys
Sells
Europe
EUR
0.6819 0.6547
U.K.
GBP
0.6064 0.5821
Australia AUD 1.0883 1.0601
Canada
CAD 1.0681 1.0253
China
CNY
6.8465 6.8017
Denmark DKK 5.0593 4.8569
Japan
JPY
90.99
87.36
Norway
NOK 5.5248 5.3038
Singap.
SGD
1.4047 1.3485
S. Africa
ZAR
7.3608 7.0663
Sweden
SEK
6.8075 6.5352
1.
Find the cost in USD of:
1. 400 Canadian dollars (CAD)
2. ¥12 430
2.
Find how many USD you could
buy for:
1. € 2500 (EUR)
2. 57000 rand (ZAR)
Commission with Buy/Sell
Make sure you choose the appropriate column (BUY or SELL).
Country
Code Buys
Sells
Europe
EUR
0.6819 0.6547
U.K.
GBP
0.6064 0.5821
Australia AUD 1.0883 1.0601
Canada
CAD 1.0681 1.0253
China
CNY
1.
Find the cost in USD of:
1.
400 Canadian dollars (CAD)
2.
¥12 430
2.
Find how many USD you could buy for:
1.
€ 2500 (EUR)
2.
57000 rand (ZAR)
6.8465 6.8017
Denmark DKK 5.0593 4.8569
Japan
JPY
90.99
87.36
Norway
NOK 5.5248 5.3038
Singap.
SGD
1.4047 1.3485
S. Africa
ZAR
7.3608 7.0663
Sweden
SEK
6.8075 6.5352
Answers:
1.
1. 390.13 USD
2. 142.28 USD
2.
1. 3666.23 USD
2. 7743.72 USD
Fixed-Rate Commission
A banker changes South African rand
to other currencies at a fixed
commission of 1.5%. Wendy wishes to
convert R800 to rubles where R1 buys
3.86 Russian rubles.
a.
What commission is charged?
b.
How much does Wendy receive?
Answers:
a.
Commission = R800 * 1.5%
= R800 * 0.015
= R12
b.
Wendy receives 788 * 3.86 rubles
≈ 3042 rubles
(We only multiply by 788 instead
of 800 because the banker took
12 for commission.)
Fixed-Rate Commission
A bank exchanges UK pounds for a
commission of 1.5%. For the following
transactions, calculate:
i.
The commission charged
ii. How much the customer
receives
a.
Converting 500 pounds to USD
where £1 UK buys 1.8734 USD.
b.
Converting £1200 UK to New
Zealand dollars where £1 UK buys
$2.8424 NZ.
Fixed-Rate Commission
A bank exchanges UK pounds for a
commission of 1.5%. For the following
transactions, calculate:
i.
The commission charged
ii. How much the customer
receives
a.
Converting 500 pounds to USD
where £1 UK buys 1.8734 USD.
b.
Converting £1200 UK to New
Zealand dollars where £1 UK buys
$2.8424 NZ.
Answers:
a.
i. 500 * 0.015 = £ 7.50
The bank charges £ 7.50 in
commission.
ii. 492.5 * 1.8734 = $ 922.65
The customer receives $ 922.65.
b.
i. 1200 * 0.015 = £ 18
The bank charges £ 18 in
commission.
ii. 1182 * 2.8424 = 43359.72 NZ.
The customer receives $3359.72
NZ.
Book Practice
S P. 458 - #3, 4
S P. 459 - #5
S P. 460 - #3
S P. 461 - #6, 7
S P. 462 - #2