Part 1 Simple Currency Conversion Simple Currency Conversion Given Conversion Explicitly Sample question 1 A bank exchanges 1 British pound GBP for 19 Australian dollars AUD Convert 40 GBP to AUD ID: 534410
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Slide1
Converting CurrenciesSlide2
Part 1
Simple Currency ConversionSlide3
Simple Currency Conversion:
Given Conversion ExplicitlySample question 1: A bank exchanges 1 British pound (GBP) for 1.9 Australian dollars (AUD). Convert:
40 GBP to AUD
500 AUD to GBP
Option 1: If you understand, multiply or divide exchange rate.
Option 2: Set up a proportion.
1 GBP = 1.9 AUD
40 * 1.9 = 76 AUD
OR , x = 76 AUD
1 GBP = 1.9 AUD500 / 1.9 = 263 GBPOR , x = 263 GBPSlide4
Simple Currency Conversion:
Practice On Your OwnA currency exchange will convert 1 Singapore dollar (SGD) to
5.4 South African rand (ZAR). Convert:
3000 SGD into ZAR b. 21000 ZAR into SGDSlide5
Simple Currency Conversion:
Practice On Your OwnA currency exchange will convert 1 Singapore dollar (SGD) to
5.4 South African rand (ZAR). Convert:
3000 SGD into ZAR b. 21000 ZAR into SGD
Try again on your own. Convert:
c. 450 SGD into ZAR d. 1.35 ZAR into SGDSlide6
Simple Currency Conversion:
Practice On Your OwnA currency exchange will convert 1 Singapore dollar (SGD) to
5.4 South African rand (ZAR). Convert:
3000 SGD into ZAR b. 21000 ZAR into SGD
Try again on your own. Convert:
c. 450 SGD into ZAR d. 1.35 ZAR into SGDSlide7
Simple Currency Conversion:
With Table of Exchange Rates1. 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.
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.)
Answers:1) a) 0.97 b) 1.032) a) 3000 * 0.625 = 1875 GBP b) 10000 * 0.6 = 6000 GBP
//////
USD
GBPCHF (Swiss frank)USD1
0.625
1.03
GBP
1.60
1
1.67
CHF
0.97
0.60
1Slide8
Simple Currency Conversion:
With Table of Exchange Rates1. Convert 200 USD into:
a. TWD b. NOK c. CNY
2. Convert 5000 NOK into:
a.
USD b. CNY
The table below shows exchange rates for the US Dollar.
///////
USD
Taiwan
Dollar (TWD)31.9632
Norwegian Kroner (NOK)5.8818
Chinese Yuan (CNY)
6.8268Slide9
Simple Currency Conversion:
With Table of Exchange Rates1. Convert 200 USD into:
a. TWD b. NOK c. CNY
2. Convert 5000 NOK into:
a.
USD b. CNY
The table below shows exchange rates for the US Dollar.
Answers:
1) a) 200 * 31.9632 = 6392.64 TWD
b) 200 * 5.8818 = 1176.36 NOK c) 200 * 6.8268 = 1365.36 CNY2) a) 5000/5.8818 = 850.08 USD b) 850.08 * 6.8268 = 5803.33 CNY
///////
1 USDTaiwan
Dollar (TWD)31.9632Norwegian Kroner (NOK)
5.8818
Chinese
Yuan (CNY)
6.8268Slide10
Videos
links
https://
www.youtube.com/watch?v=JcqNpwWnZ2k
https://www.youtube.com/watch?v=UhjazwdtfmUSlide11
Trading with Commission
First Stop: Commission via Exchange RateSlide12
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.Slide13
Commission with Buy/Sell
Convert 400 USD into euros.
How much does it cost in USD to buy 5000 Yen (JPY)?
How many USD can you buy for 2000 Swedish kronor?
Make sure you choose the appropriate column (BUY or SELL).
Answers:
400 * 0.6547 = 261.88 EUR
5000/87.36 = 57.23 USD
2000/6.8075 = 293.79 USD
Country
Code
BuysSells
EuropeEUR
0.68190.6547U.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
6.5352Slide14
Commission with Buy/Sell
Find the cost in USD of:
400 Canadian dollars (CAD)
¥12 430
Find how many USD you could buy for:
€ 2500 (EUR)
57000 rand (ZAR)
Make sure you choose the appropriate column (BUY or SELL).
Country
Code
Buys
SellsEuropeEUR0.6819
0.6547U.K.
GBP0.60640.5821Australia
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
6.5352Slide15
Commission with Buy/Sell
Find the cost in USD of:
400 Canadian dollars (CAD)
¥12 430
Find how many USD you could buy for:
€ 2500 (EUR)
57000 rand (ZAR)
Make sure you choose the appropriate column (BUY or SELL).
Answers:
1. 390.13 USD
2. 142.28 USD1. 3666.23 USD2. 7743.72 USD
Country
Code
BuysSellsEuropeEUR
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
6.5352Slide16
Fixed-Rate Commission
Answers:
Commission = R800 * 1.5%
= R800 * 0.015
= R12
Wendy receives 788 * 3.86 rubles
≈ 3042 rubles
(We only multiply by 788 instead of 800 because the banker took 12 for 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.
What commission is charged?
How much does Wendy receive?Slide17
Fixed-Rate Commission
A bank exchanges UK pounds for a commission of 1.5%. For the following transactions, calculate:
The commission charged
How much the customer receives
Converting 500 pounds to USD where £1 UK buys 1.8734 USD.
Converting £1200 UK to New Zealand dollars where £1 UK buys $2.8424 NZ.Slide18
Fixed-Rate Commission
Answers:
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.
i
. 1200 * 0.015 = £ 18The bank charges £ 18 in commission.ii. 1182 * 2.8424 = 43359.72 NZ.The customer receives $3359.72 NZ.
A bank exchanges UK pounds for a commission of 1.5%. For the following transactions, calculate:
The commission charged
How much the customer receives
Converting 500 pounds to USD where £1 UK buys 1.8734 USD.
Converting £1200 UK to New Zealand dollars where £1 UK buys $2.8424 NZ.Slide19
Textbook Practice