Suggested Lesson Plan
for this Worksheet
Foreign exchange rates, or the rate of exchange,
is the rate at which one currency is converted into another
currency. Exchange rates are usually given as one unit of one
currency to X units of another currency. Exchange rates give
the relative prices of different currencies.
For example, if the US Dollar to British Pound
exchange rate is 1:2 then one US Dollar is converted into two
British Pounds.
To calculate the reverse, we divide 1 by the
exchange rate. Using the above example, one British Pound
would be converted into 1 divided by 2, or 1/2. So One British
Pound would equal 1/2 of a US Dollar.
Questions for discussion:
Why might we need to know exchange rates?
What happens if one countries currency falls
drastically vs another countries currency?
When might you use exchange rates?
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