GCSE Maths Practice: currency-conversion

Question 2 of 10

Use the given exchange rate to convert the amount from pounds into euros, showing careful handling of decimals.

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\( \begin{array}{l} \text{£1 = €1.185} \\ \text{Convert £209.60 to euros.} \end{array} \)

Choose one option:

Avoid rounding during intermediate steps. Round only once at the end.

Higher GCSE Currency Conversion with Precision

At Higher GCSE level, currency conversion questions are designed to test accurate decimal arithmetic, careful rounding, and correct interpretation of exchange rates. Unlike Foundation questions, Higher-tier problems often include exchange rates with three decimal places and amounts that do not divide neatly, increasing the risk of rounding errors.

Interpreting a Three-Decimal Exchange Rate

An exchange rate such as £1 = €1.185 means that every pound is worth one euro and 18.5 cents. Because the rate has three decimal places, calculations must be carried out carefully to avoid losing accuracy.

Since the exchange rate is greater than 1, converting from pounds to euros will increase the numerical value. Recognising this helps you judge whether your final answer is sensible.

Correct Method for Higher Tier Questions

Use the following structured approach:

  • Write down the multiplication clearly.
  • Carry out the full decimal multiplication.
  • Keep all decimal places during calculation.
  • Round only the final answer to two decimal places.

Rounding too early is one of the most common Higher-tier errors.

Worked Example (Different Numbers)

Suppose the exchange rate is £1 = €1.172.

Convert £346.80 to euros.

Step 1: Write the calculation: 346.80 × 1.172

Step 2: Multiply: 346.80 × 1.172 = 406.4496

Step 3: Round to two decimal places → €406.45

Another Example

If £1 = €1.094 and someone exchanges £512.30:

512.30 × 1.094 = 560.4562 → €560.46

Common Higher-Tier Mistakes

  • Rounding mid-calculation: This reduces accuracy.
  • Incorrect decimal placement: Always count decimal places carefully.
  • Forgetting to round: GCSE questions usually expect two decimal places for money.
  • Relying on estimation alone: Higher-tier questions require exact calculation.

Real-Life Applications

Accurate currency conversion is essential in many real-world situations:

  • International travel and accommodation bookings
  • Overseas online shopping
  • Business transactions involving foreign currencies
  • Banking, finance, and accounting

Frequently Asked Questions

Why must I round to two decimal places?
Because most currencies are expressed to two decimal places.

Should I estimate first?
Yes. Estimation helps you check that your final answer is reasonable.

Are three-decimal exchange rates common at Higher GCSE?
Yes. They are used to test precision and rounding skills.

Study Tip

Write every step clearly and keep full precision until the final rounding step. This dramatically reduces errors in Higher-tier currency questions.

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