Study Notes
Money conversions involve using exchange rates to convert one currency to another. Different countries use different currencies, each with main and smaller units.
- Exchange Rate — the value of one currency for the purpose of conversion to another. Example: If 1 USD = 0.85 EUR, then 100 USD = 85 EUR.
- Main Unit — the primary unit of currency in a country. Example: In the USA, the main unit is the dollar.
- Smaller Unit — a subunit of the main currency. Example: In the USA, the smaller unit is the cent, where 100 cents = 1 dollar.
Exam Tips
Key Definitions to Remember
- Exchange Rate: The value of one currency for the purpose of conversion to another.
- Main Unit: The primary unit of currency in a country.
- Smaller Unit: A subunit of the main currency.
Common Confusions
- Forgetting to multiply or divide by the exchange rate correctly.
- Mixing up the main and smaller units of a currency.
Typical Exam Questions
- How do you convert 4000 dinar to pounds if 1 dinar = £2.13? Multiply 4000 by 2.13 to get the amount in pounds.
- An American tourist changes 1 = 12.90. How much does she get in rands? Multiply 3000 by 12.90 to get the amount in rands.
- How many Singapore dollars does Nitini receive if 119050 INR is converted at 1 SGD = 47.62 INR? Divide 119050 by 47.62 to get the amount in SGD.
What Examiners Usually Test
- Ability to use exchange rates to convert between currencies.
- Understanding of the relationship between main and smaller units of currency.
- Accuracy in calculations involving currency conversions.