Understanding Exchange Rate Notation
Part of Exchange Rates — GCSE Mathematics
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. This topic appears less often, but it can still be a useful differentiator on mixed-topic papers. It is section 3 of 7 in this topic. Use this deep dive to connect the idea to the wider topic before moving on to questions and flashcards.
Topic position
Section 3 of 7
Practice
12 questions
Recall
22 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