Different countries use different currencies:

The UK uses pounds (£)

The USA uses US Dollars ($)

Many counties in Europe use the Euro (€)

To convert between different currencies we use an exchange rate.

We need to be able to convert between different currencies using a given exchange rate.

If we are told the exchange rate is £1 = €1.15 it means that every 1 pound is worth 1.15 Euros.

If we wanted to change £250 into Euros we would need to calculate 250 × 1.15 to work out how many Euros we would get.

250 × 1.15 = 287.5

£250 = €287.50

We would get €287.50 in exchange for £250

If we want to convert €500 into pounds (and the exchange rate is still £1 = €1.15) we will have to calculate 500 ÷ 1.15

500 ÷ 1.15 = £434.78 (we always round money to 2 decimal places because we cannot have half a penny)

£434.78 = €500

We would get £434.78 in exchange for €500

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