NAME:
ER KEY
DATE:
Do You Have a Yen to Go to
College?
Introduction:
Carlos is a senior at local high school. When he
graduates, he plans to study computer animation.
He has applied to a number of two-year programs,
and recently, he received letters of acceptance from
four schools, one in the United States and three abroad. Carlos has funding from several sources,
providing him with a $8,000 scholarship to be used at the school of his choice, a student loan of
$7,000, and $4,000 of personal savings.
Your job is to evaluate the options that will allow Carlos to complete a 2-year computer
animation program, given the $19,000 of funding. The real issue for Carlos to consider is what
he can afford. Listed below are the four schools to which Carlos has been accepted, including the
package of options and expenses for each.
Task:
Cost per year to complete a two-year program in computer animation
The Tokyo Technical Institute
The London School of Technology
Tuition: 750,000 yen
Room & Board: 250,000 yen
TTI scholarship: 129,000 yen
Tuition: 3,600 pounds
Room & Board: 1200 pounds
LFS scholarship: 600 pounds
The University of Helsinki
University of California at Los Angeles
Tuition: 6,810 euro
Room & Board: 3,466 euro
UH scholarship: 2,840 euro
Tuition: 8,000 dollars
Room & Board: 6,000 dollars
UCLA scholarship: 3,000 dollars
NAME:
ER KEY
DATE:
Activity 1
Exchange Rates
Whoa! What is a yen, a euro, and a pound? In the United States our currency is the dollar; in
Japan, the United Kingdom, and Finland, the currencies are the yen, the pound, and the euro. So,
what exactly is currency? People use currency, in the form of coins and bills, as payment for
goods and services. What forms does United States currency take? Each individual country has
its own currency that is accepted as payment for goods and services. Is it possible that all
currencies are worth the same amount? Tuition in Tokyo is 580,500 yen, in London it is 3,000
pounds, and in Helsinki, it is 29,810 euro. These amounts clearly differ from the $5,000 cost of
tuition at UCLA. Carlos must figure out a way to compare the tuition prices listed at each school
in order to make a decision.
Fortunately, there is a system in place that allows the currency of one country to be exchanged
for the currency of another. This system is the currency exchange market and it provides the
prices of one currency in terms of another. For example, let's price the currencies of Japan, the
United Kingdom, and Finland in terms of how much of each a single dollar will buy.
$1 = 94.62 yen
$1 = .66 pounds
$1 = .76 euro
These exchange rates will help Carlos compare the costs between schools. With a calculator and
simple proportion, we can calculate the dollar cost of tuition at the Tokyo Technical Institute.
Tuition is 750,000 yen, and we know 1 dollar = 94.62 yen. As a proportion, we write 1 over
94.62 equals n dollars over 580,500 yen.
1 dollar
94.62 yen
=
n dollars
750,000 yen
As a result, 1 multiplied by 580,500 = n multiplied by 94.62. To solve for n, divide both sides of
the equal sign by 94.62 and we find that n = 7,926.44. What this tells us is that tuition of 580,500
yen is equivalent to $7,926.44. How does this compare to the tuition at UCLA? Based on the
exchange rates listed above, convert the costs and scholarship at each school into dollar amounts.
NAME:
ER KEY
DATE:
A. The Tokyo Technical Institute
Tuition Costs
7926.44
$____________________
1. Room and Board Costs =
2642.15
$____________________
2. TTI scholarship =
1363.35
$____________________
9205.04
3. Dollar cost of attending school in Tokyo $____________________
B. The London School of Technology
4. Tuition cost =
5454.55
$____________________
5. Room and Board costs=
1818.19
$____________________
6. LST scholarship =
909.09
$____________________
6363.65
7. Dollar cost of attending school in London $____________________
NAME:
ER KEY
DATE:
C. The University of Helsinki
8. Tuition cost =
8960.52
$____________________
9. Room & Board cost =
4560.53
$____________________
10. UH scholarship =
3736.84
$____________________
9784.21
11. Dollar cost of attending school in Helsinki. $____________________
12. List the dollar cost for 2 years at each school in the space below:
Tokyo 18410.08
London 12727.3
$____________________
$____________________
Helsinki 19568.42
Los Angeles 22,000
$____________________
$____________________
13. Based on the dollar costs above, which schools can Carlos afford to attend?
he would be able to afford Tokyo and London
14. What other additional costs should Carlos consider when making his decision?
Airfare, traveling, food,….
NAME:
ER KEY
DATE:
Activity 2
Changes in Rate of Exchange
Carlos was surprised the other day when his friend Janet asked him how the movement in
exchange rates might affect his cost of attending school outside of the United States. Carlos had
to admit he didn’t know exchange rates fluctuated. Janet told him that rates of exchange actually
change on a daily basis and that he should check out current rates on the Internet. Find the
current dollar rates of exchange for the yen, pound, and euro at the following site,
www.ratesfx.com/rates/rate-converter.html
1. Record the current exchange rates for the yen, pound, and euro.(answers will depend upon the
change in the exchange rates)
Original Exchange Rate
Current Exchange Rate
$1 = 94.62 yen
$1 = _____________ yen
$1 = .66 pounds
$1 = _____________ pounds
$1 = .76 euro
$1 = _____________euro
Janet also told Carlos that when the dollar buys fewer yen, people say the dollar has depreciated
against the yen; when it buys a greater number of pounds or euro, we say the dollar has
appreciated against the pound and the euro. How do you think these shifts in exchange rates will
affect Carlos’s cost to attend school outside of the United States? It will make it more or less
expensive
2. Utilize the exchange rate converter to recalculate the dollar cost of each school based on the
current exchange rates. www.ratesfx.com/rates/rate-converter.html
Tokyo
London
Helsinki
Los Angeles
$________________
$________________
$_______________
$______________
3. What conclusion would you make about the cost of attending school abroad when the dollar
appreciates against a foreign currency? Less expensive
4. What conclusion would you make about the cost of attending school abroad when the dollar
depreciates against a foreign currency? More expensive
NAME:
ER KEY
DATE:
Homework
Activity 3
Study Option Summary
Select one of the foreign study options and prepare a written summary that will help Carlos make
a decision about which school to attend. The summary should include the following items:
1. Name of the school, its location, and cost to attend two years at the current rate of
exchange.
2. Price of a round-trip air fare.
http://travelocity.com/
3. Photo of the currency
Yen: www.cedarville.edu/academics/education/resource/geo/japan/economy.htm
Pound: www.woodlands-junior.kent.sch.uk/customs/questions/money/coins.htm
Euro: http://eurokulture.missouri.edu/wp-content/uploads/2009/12/EurosC-7318.jpg
4. Historical exchange rates. Record and graph five rates of exchange, from five years, two
years ago to the current date, one year ago, six months ago, three months ago, one month
ago, and the currency rate. At the following web site, enter in the date box the day,
month, and year for five years. In the second country drop-down box, select the country
on which you are writing the brief and then click ‘convert now’. Follow the same process
to locate the other rates.
http://www.oanda.com/currency/converter/
Once you have the five rates of exchange, setup a simple graph with the dates on the
horizontal axis and the exchange rate per dollar on the vertical axis.