Knowledge Organiser: Exchange Rates
Part of Exchange Rates · GCSE GCSE Mathematics revision
This topic summary covers Knowledge Organiser: Exchange Rates within Exchange Rates for GCSE Mathematics. Revise Exchange Rates in Ratio & Proportion for GCSE Mathematics with 12 exam-style questions and 22 flashcards. This topic appears less often, but it can still be a useful differentiator on mixed-topic papers. It is section 8 of 8 in this topic. Use this topic summary to connect the idea to the wider topic before moving on to questions and flashcards.
Topic position
Section 8 of 8
Practice
12 questions
Recall
22 flashcards
Knowledge Organiser: Exchange Rates
Key Terms
- Exchange rate: The value of one currency expressed in terms of another
- Base currency: The currency you are converting from (listed first)
- Quote currency: The currency you are converting to
- Commission: A percentage fee charged for currency exchange
- Spread: The difference between the buying and selling rates offered by a bank
Must-Know Facts
- To convert FROM the base currency: multiply by the exchange rate
- To convert TO the base currency: divide by the exchange rate
- If £1 = €1.15, then £200 = €230 (multiply) and €230 = £200 (divide)
- Commission reduces the final amount — apply it after conversion
- Banks charge higher rates to sell currency and lower rates to buy it back
- Always check which direction you are converting before calculating
Key Methods
- Pounds → Foreign: amount × rate
- Foreign → Pounds: amount ÷ rate
- With % commission: convert first, then subtract (commission % × converted amount)
- Comparing services: calculate total cost including all fees for a fixed foreign amount
Key Formulas
- Pounds → Euros (rate = 1.15): £amount × 1.15
- Euros → Pounds: €amount ÷ 1.15
- Commission: converted amount × (commission % ÷ 100)
- Best deal: compare total pounds spent/received for a given amount
Common Mistakes
- Multiplying vs dividing: Converting TO foreign currency → multiply by rate; FROM foreign currency → divide by rate
- Applying commission to wrong amount: Commission is usually taken from the converted amount, not the original
- Not comparing like with like: When comparing exchange services, convert the same amount and include all fees
- Rate direction: Check whether the rate is "pounds per unit" or "units per pound" — the direction determines whether to × or ÷
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Practice Questions for Exchange Rates
The exchange rate is £1 = €1.15. How many euros would you get for £100?
The exchange rate is £1 = $1.25. A jacket costs £89 in the UK and $105 in the USA. In which country is the jacket cheaper? Show your working.
Quick Recall Flashcards
12 questions on Exchange Rates — practise free
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