1. A shop sells a pair of shoes for £40. The shop raises the price by 10%.
What
is the new price of the shoes?
2. A mobile phone originally costs £300. It is discounted by 15% in a sale. What
is the new price?
3. A laptop costs £500. Over a year, its price increases by 5% each quarter.
What is its price after a year?
4. A company’s revenue is £1,000,000. It decreases by 8% in the first year, then
increases by 12% the following year. What is the revenue at the end of the
second year?
5. Product A’s price increases from £20 to £25, and Product B’s price
increases from £30 to £34. Which product experienced a higher
percentage increase?
Definition of Exchange Rates:
£1 : 5
Convert Pounds to Convert Dirhams to
Answer in AED Answer in £s
Dirhams Pounds
£20 400AED
£30.50 1000AED
£2,000 250AED
Complete the purchasing activity for round the world
Country Item Price in Pounds Number of Stars
USA
UK
Russia
Australia
South Africa
Starter for 10:
Country Cost of Import 1 ($) Cost of Import 2 ($) Cost of Import 3 ($)
Mongolia
1,284,000 MNT
Argentina
310,875 ARS
Sweden
3982.50 SEK
Kenya
60,183.75 KNS
Canada
506.25 CND
UAE
1376.25 AED
What have you noticed about the changes in the values from import 1 to import 2?
What impact does this have on your t-shirt business?
What have you noticed about the changes in the values from import 1 to import 3?
What impact does this have on your t-shirt business?
You export $75 worth of T-shirts to each country how much do you spend in each country in their
currency?
Country Cost of Export 1 Cost of Export 2 Cost of Export 3
India
Azerbijan
Egypt
Japan
Mexico
Brazil
What have you noticed about the changes in the values from export 1 to export 2?
What impact does this have on your t-shirt business?
What have you noticed about the changes in the values from export 1 to export 3?
What impact does this have on your t-shirt business?
Starter for 10:
1.A UK-based bakery sells special cakes in France. The cost of producing each cake is £5, and they sell
for €12 in France. The exchange rate is €1 = £0.85.
How much profit does the bakery make per cake in pounds (£)?
2. A British electronics company sells gaming consoles in Japan for ¥50,000 each. The variable cost
per console is £150, and the fixed costs for operating in Japan are £10,000 per month. The exchange
rate is ¥1 = £0.006.
If the company sells 400 consoles in a month, what is the total profit in pounds (£)?
3. A UK clothing retailer imports jackets from the USA at a cost of $30 per jacket. The company sells
them in the UK for £50 each. The exchange rate is $1 = £0.78.
The company also incurs fixed costs of £5,000 per month and shipping costs of $2 per jacket.
If they sell 600 jackets in a month, what is their total profit in pounds (£)?
When a currency appreciates imports from a foreign country to the home country
become _______________________
When a currency depreciates imports from a foreign country to the home country
become _______________________
When a currency appreciates exports from the home country to the foreign country
become ______________________
When a currency depreciates exports from the home country to the foreign country
become ______________________
We can use the following to help us remember this:
S W
P P
I I
C D
E E
D C
Impact of exchange rates
cheaper, more, decreases, increases, competitiveness, expensive, alternatives, higher, services,
lower, appreciates, less, depreciates, goods
When a currency ________________, the foreign country now has to use
________________ of their currency to buy the domestic goods and services. As a result,
exports become ________________, which ________________ the competitiveness of
the business in international markets as customers find ________________ alternatives.
However, for imports, as the home business doesn’t need to use as ________________ of
their currency to purchase goods abroad, they become ________________, leading to
________________ costs for the business of imported raw materials.
When a currency ________________, the foreign country now has to use
________________ of their currency to buy the domestic goods and services. As a result,
exports become ________________, which ________________ the competitiveness of
the business in international markets.
However, for imports, as the home business now has to use ________________ of their
currency to purchase goods and services abroad, they become ________________, leading
to ________________ costs for the business when importing raw materials.
Elite Watches Ltd is a UK-based business that imports high-end luxury watches from Switzerland and sells
them in the UK. The company has built a reputation for offering exclusive, limited-edition watches that
attract wealthy collectors.
Explain the impact of a depreciation of the pound against the Euro to Elite Watches.
British Bikes Ltd is a UK manufacturer of high-performance bicycles that are popular in international markets.
The company exports 60% of its bikes to the USA and Australia, while sourcing most of its raw materials,
including high-grade aluminium and carbon fibre, from Japan.
Explain the impact of an appreciation of the pound against the Japanese Yen to British Bikes Ltd
Regal Coffee Ltd is a UK-based coffee retailer that imports coffee beans from Colombia and sells them in the
UK and Europe. The company has built strong relationships with Colombian farmers and prides itself on
offering high-quality, ethically sourced coffee.
Explain the impact of an depreciation of the pound against the Columbian Peso to Regal Coffee Ltd
Luxe Leather Ltd is a UK-based company that imports premium leather from Italy to manufacture high-end
handbags and accessories. It sells these products in the UK and exports to the USA.
January 2024: £1 = €1.17 £1 = $1.35
July 2024: £1 = €1.10 £1 = $1.42
Using the data above can you explain two impacts on Luxe Leather