This deep dive covers Understanding Exchange Rate Notation within Exchange Rates for GCSE Mathematics. Revise Exchange Rates in Ratio & Proportion for GCSE Mathematics with 12 exam-style questions and 22 flashcards. Use this page as part of a wider topic revision path rather than treating it as an isolated fact. It is section 3 of 8 in this topic. Use this deep dive to connect the idea to the wider topic before moving on to questions and flashcards.
Understanding Exchange Rate Notation
Direct vs Indirect Quotes
Direct quote (from UK perspective): £1 = $1.25 means 1 pound buys 1.25 dollars
Indirect quote: $1 = £0.80 means 1 dollar buys 0.80 pounds
Common Exchange Rate Formats
| Format | Meaning | Example |
|---|---|---|
| GBP/EUR = 1.15 | 1 pound = 1.15 euros | £100 = €115 |
| EUR/GBP = 0.87 | 1 euro = 0.87 pounds | €100 = £87 |
| USD/GBP = 0.75 | 1 dollar = 0.75 pounds | $100 = £75 |
Basic Currency Conversion
To convert FROM base currency TO quote currency:
Amount in quote currency = Amount in base currency × Exchange rate
Example: £200 to euros at £1 = €1.15
€ amount = £200 × 1.15 = €230
To convert FROM quote currency TO base currency:
Amount in base currency = Amount in quote currency ÷ Exchange rate
Example: €230 to pounds at £1 = €1.15
£ amount = €230 ÷ 1.15 = £200
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.