GCSE Maths Practice: currency-conversion

Understanding Currency Conversion (GCSE Maths)

Currency conversion is a common GCSE Maths topic that links ratio and proportion to real-life money problems. It involves changing an amount of money from one currency to another using a given exchange rate. This is especially useful when travelling, shopping online from other countries, or comparing prices internationally.

What Is an Exchange Rate?

An exchange rate tells you how much one unit of a currency is worth in another currency. For example, if £1 is equal to €1.10, this means that every pound can be exchanged for one euro and ten cents. Exchange rates are often written in the form:

£1 = €1.10

This is a proportional relationship, meaning the amount in euros increases in direct proportion to the amount in pounds.

How to Convert Pounds to Euros

When converting from pounds to euros, you usually multiply by the exchange rate. This is because the value in euros is greater than the value in pounds when the rate is more than 1.

General method:

• Write down the amount in pounds.
• Multiply it by the exchange rate.
• Round to two decimal places if dealing with money.

Worked Example (Different Numbers)

Suppose the exchange rate is £1 = €1.20.

How many euros is £40?

Step 1: Write the calculation: 40 × 1.20

Step 2: Multiply: 40 × 1.20 = 48

Step 3: Add the currency symbol → €48.00

Another Example

If £1 = €0.90 and you exchange £25:

25 × 0.90 = 22.5 → €22.50

Common Mistakes to Avoid

• Dividing instead of multiplying: This often happens when students forget which currency they are converting to.
• Forgetting the currency symbol: Always include €, £, or $ in your final answer.
• Incorrect rounding: Money should normally be written to two decimal places.
• Using the wrong exchange rate: Always double-check the rate given in the question.

Real-Life Applications

Currency conversion is used in many real-life situations:

• Planning spending money for holidays abroad
• Shopping on international websites
• Comparing wages or prices between countries
• Understanding exchange rates shown in airports and banks

Frequently Asked Questions

Do I always multiply when converting currency?
Not always. If converting from a larger-value currency to a smaller one, you may need to divide. Always think about which direction the conversion goes.

Why do we round to two decimal places?
Because most currencies use two decimal places for cents or pence.

Will GCSE questions always give the exchange rate?
Yes. You will not be expected to memorise exchange rates.

Study Tip

Write down the exchange rate first and clearly decide whether the value should get bigger or smaller before you calculate. This helps prevent careless mistakes.