Currency conversion

Topic guide

What this worksheet practises

This worksheet provides practice on converting money between different currencies. This is a highly practical mathematical skill used for international travel and trade. It relies heavily on ratio and direct proportion.

Key method

To convert currency, you must use the exchange rate given in the question. This acts as your multiplier.

• Identify the given exchange rate (e.g. £1 = $1.30).
• If you are changing your home currency (£) into the foreign currency, multiply the amount by the exchange rate.
• If you are changing the foreign currency back into your home currency (£), divide the amount by the exchange rate.

Worked example

The exchange rate is £1 = €1.15. Convert £400 into Euros, and then convert €345 back into Pounds.

Step 1: Convert £ to €.

We are going from the home currency to the foreign currency, so we multiply.

400 × 1.15 = 460.

The answer is €460.

Step 2: Convert € to £.

We are going backwards from the foreign currency to the home currency, so we divide.

345 ÷ 1.15 = 300.

The answer is £300.

Common mistakes to avoid

The most common mistake is dividing when you should multiply, or vice versa. If you divide 400 by 1.15, you get 347.82. But looking at the exchange rate, €1.15 is bigger than £1, so the number of Euros must be bigger than the number of Pounds. 347 is smaller than 400, proving the wrong operation was used.

How to check your answer

Always perform a quick logic check comparing the two numbers in the exchange rate. If the foreign number is larger than 1 (like 1.15), your foreign currency answer must be a larger number than your starting Pounds. If it isn't, you have multiplied/divided the wrong way around.