GCSE Maths Practice: currency-conversion

Currency Conversion Using Exchange Rates

Currency conversion is an essential GCSE Maths skill that applies ratio and proportion to real-world money problems. At Foundation level, questions usually involve a single exchange rate and a straightforward calculation, but careful thinking is still required to avoid common mistakes.

Understanding Exchange Rates

An exchange rate tells you how much one unit of a currency is worth in another currency. For example, if £1 = €1.25, this means that every pound is worth one euro and twenty-five cents. Exchange rates are always given in exam questions, so your focus should be on using them correctly.

Because the exchange rate here is greater than 1, converting from pounds to euros will increase the numerical value. Recognising this before calculating helps you spot unreasonable answers.

Which Operation Should You Use?

At GCSE Foundation level, currency conversion follows a simple rule:

• Pounds → euros: multiply by the exchange rate
• Euros → pounds: divide by the exchange rate

Before calculating, always ask yourself whether the answer should be bigger or smaller than the original amount.

Worked Example (Different Numbers)

Suppose the exchange rate is £1 = €1.40.

Which option correctly shows the value of £30 in euros?

Step 1: Estimate first. £30 × 1.4 is just over £30 × 1.5, so the answer should be just over €40.

Step 2: Multiply: 30 × 1.40 = 42

Step 3: Write the amount as money → €42.00

Another Example

If £1 = €0.80 and someone exchanges £90:

90 × 0.80 = 72 → €72.00

Common Mistakes to Avoid

• Choosing an answer without calculating: Estimation helps, but calculation confirms accuracy.
• Dividing instead of multiplying: This leads to answers that are far too small.
• Ignoring decimal values: Exchange rates often include decimals that must be handled carefully.
• Forgetting the currency symbol: Correct notation is important in GCSE exams.

Why Multiple-Choice Questions Are Used

Multiple-choice currency questions test more than calculation. They also check whether you can:

• Estimate sensibly
• Eliminate unreasonable options
• Apply proportional reasoning confidently

Frequently Asked Questions

Do I need to show working in multiple-choice questions?
In exams, working is not always required, but it is strongly recommended when practising.

Will Foundation questions include awkward exchange rates?
They may include decimals like 1.25, but the calculation will still be one step.

Should I always round to two decimal places?
Yes, unless the result is exactly a whole number.

Study Tip

For multiple-choice questions, estimate first to remove impossible answers, then confirm the correct option with a clear calculation.