GCSE Maths Practice: currency-conversion

Currency Conversion Using Exchange Rates

Currency conversion is a common GCSE Maths topic that links ratios, multiplication, and real-life money skills. Questions like this test your ability to use an exchange rate correctly and to decide whether a value should increase or decrease when converting between currencies.

What Is an Exchange Rate?

An exchange rate shows how much one currency is worth compared to another. For example, if £1 = €1.15, this means that one pound can be exchanged for one euro and fifteen cents. Exchange rates are often written clearly in GCSE questions so that you can focus on applying the maths.

Because the exchange rate here is greater than 1, the value in euros will be greater than the value in pounds.

Choosing the Correct Method

A key GCSE skill is deciding whether to multiply or divide:

• If the exchange rate is greater than 1, converting from pounds to euros requires multiplication.
• If the exchange rate is less than 1, the value will decrease, but multiplication is still used.

Before calculating, always ask yourself: Should my answer be bigger or smaller?

Worked Example (Different Numbers)

Suppose the exchange rate is £1 = €1.20.

How many euros is £45?

Step 1: Estimate first. Since €1.20 is a bit more than €1, the euro amount should be slightly more than £45.

Step 2: Multiply: 45 × 1.20 = 54

Step 3: Write the answer as money → €54.00

Another Example

If £1 = €0.90 and someone exchanges £70:

70 × 0.90 = 63 → €63.00

Common Mistakes to Avoid

• Dividing instead of multiplying: This can lead to answers that are far too small.
• Not estimating first: Estimation helps catch errors early.
• Incorrect rounding: Money values should usually be written to two decimal places.
• Missing currency symbols: Always include € or £ in your final answer.

Real-Life Uses of Currency Conversion

Currency conversion is used in many everyday situations, such as:

• Planning spending money for holidays abroad
• Buying items from international websites
• Comparing prices between countries
• Managing budgets for school trips or travel

Frequently Asked Questions

Will Foundation GCSE questions always be this straightforward?
Yes. Foundation questions usually involve a single calculation with a simple decimal exchange rate.

Do I need to memorise exchange rates?
No. The exchange rate will always be given in the question.

Should answers always be written to two decimal places?
Yes, unless the amount is a whole number of euros.

Study Tip

Always estimate before calculating. If your final answer does not match your estimate, recheck your working.