GCSE Maths Practice: currency-conversion

Higher GCSE Currency Conversion with Decimals

At Higher GCSE level, currency conversion questions are designed to test accuracy, careful decimal multiplication, and correct rounding. Unlike Foundation questions, the numbers are often less convenient, which increases the chance of small but costly mistakes.

Understanding the Exchange Rate

An exchange rate compares the value of two currencies. For example, if £1 = €1.18, this means one pound is worth one euro and eighteen cents. When converting from pounds to euros using this rate, the value will increase because the rate is greater than 1.

Before calculating, it is useful to estimate the size of the answer. £145 × 1.18 is close to £145 × 1.2, so the result should be a little below €174. This helps you judge whether your final answer is sensible.

Correct Method for Higher Tier Questions

Use a clear, structured method:

• Write the multiplication clearly.
• Multiply using full decimal accuracy.
• Do not round during intermediate steps.
• Round the final answer to two decimal places.

Rounding too early is one of the most common causes of lost marks at Higher tier.

Worked Example (Different Numbers)

Suppose the exchange rate is £1 = €1.21.

Convert £132 to euros.

Step 1: Estimate first. £132 × 1.2 ≈ €158.4, so the answer should be just above this.

Step 2: Multiply: 132 × 1.21 = 159.72

Step 3: Round if necessary → €159.72

Another Example

If £1 = €1.07 and someone exchanges £268:

268 × 1.07 = 286.76 → €286.76

Common Higher-Tier Errors

• Incorrect decimal placement: Always check how many decimal places are needed.
• Rounding part-way through: This reduces accuracy.
• Ignoring estimation: Estimation helps catch large mistakes.
• Forgetting currency notation: Correct symbols are required.

Real-Life Relevance

Higher-level currency conversion skills are used in real-life situations such as:

• Booking travel and accommodation abroad
• Managing international purchases or invoices
• Comparing prices or salaries across countries
• Understanding banking and exchange services

Frequently Asked Questions

Why must I round to two decimal places?
Because most currencies use two decimal places for cents.

Is estimation required in exams?
It is not always required, but it is strongly recommended.

Are questions like this common at Higher GCSE?
Yes. Decimal-heavy currency questions are a standard Higher-tier topic.

Study Tip

Always estimate first, calculate carefully, and round only once at the end. This three-step habit greatly reduces errors in Higher GCSE currency conversion questions.