Key Concept Activity Lab Workbook, Developmental Mathematics 4e Chapter 4
2. Exploration Activity—Exchange Rates
In March 2017, the rates of exchange between the United States dollar (USD) and selected
foreign currencies were as listed in the table below. Exchange rates can tell you what U.S.
dollars are equivalent to in a foreign currency or what a foreign currency is equivalent to in U.S.
dollars. For example, on March 10, 2017, 1 USD equaled nearly 7 Chinese yuan (6.91 CNY),
almost 20 Mexican pesos (19.68 MXN), or about 115 Japanese yen (115.28 JPY). The values in
the table list the exchange rates as units of foreign currency per 1 USD.
0.94 EUR
The euro/dollar exchange rate can be expressed as , meaning that there are 0.94 euro to
1 USD
1 USD
every 1 U.S. dollar. This rate can also be written as , meaning that there is 1 U.S.
0.94 EUR
dollar to every 0.94 euro. Assume that all transactions referred to in this activity occur during
March 2017 at the rates shown in the table below.
Foreign Rate Foreign Currency Price Rate
Currency Units per 1 USD of a $500 (USD) TV USD / unit
Australian dollar - AUD ($) 001.33
British pound - GBP (₤) 000.82
Canadian dollar - CAD ($) 001.35
Chinese yuan - CNY (¥) 006.91
Euro - EUR (€) 000.94
Japanese yen - JPY (¥) 115.28
Mexican peso - MXN ($) 019.68
(Exchange rates recorded on March 10, 2017)
a. Suppose you buy a basic TV for $500 in the U.S. The second column of the table expresses
the number of foreign currency units that are equivalent to 1 U.S. dollar (that is, units per 1
USD). Complete the third column of the table by converting the price of the same TV to the
currency of each country.
b. If a Canadian citizen buys a car in the U.S. that sells for 20,000 USD, how many Canadian
dollars (CAD) must be exchanged to make the purchase in U.S. dollars? Show all work.
c. Suppose a U.S. worker would like to take a vacation to Mexico and decides to set aside one
week’s pay for spending money while she is on vacation. She earns 11.58 USD per hour
(after all payroll deductions) and works a 40-hour week. If she exchanges her entire week’s
earnings for Mexican pesos, how many pesos will she be able to take with her on vacation?
Use the exchange rate given in the table, show all your work, and round your answer to the
nearest hundredth.
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Chapter 4 Key Concept Activity Lab Workbook, Developmental Mathematics 4e
d. Use the fourth column in the table to list each of the exchange rates as U.S. dollars per unit of
foreign currency. For example, 1 USD per 0.94 EUR can be expressed as the ratio
1 USD
1.064 dollars/euro, meaning there are 1.064 U.S. dollars in 1 euro, or that 1 euro
0.94 EUR
is approximately equal to 1.064 U.S. dollars. Use a calculator as needed. Round results to
the nearest thousandth.
e. If you took a vacation on the French Riviera that cost 27,672.30 EUR, how many U. S.
dollars would need to be exchanged for the trip? Round your answer to two decimal places.
f. Suppose you took a job in Japan that has a salary of 7,225,800 yen. What would be your
salary in U.S. dollars? Round to the nearest dollar.
The table on the first page of this activity is set up for the conversion between U.S. dollars and
various foreign currencies. However, you can also calculate the exchange rate of each foreign
currency in terms of any other foreign currency. For example, we know that 1 U.S. dollar equals
0.94 EUR, and 1 U.S. dollar equals 0.82 GBP. This implies that 0.94 EUR = 0.82 GBP.
This is an example of cross-exchange rates. The EUR/GBP exchange rate can be calculated by
dividing both sides of the equality by 0.82,
0.94 EUR 0.82 GBP
0.94 EUR 0.82 GBP
0.82 0.82
1.146 EUR 1 GBP
This tells us that 1 British pound (GBP) is approximately equal to 1.146 euros (EUR).
g. Use the ideas developed above to complete the following table of cross-exchange rates.
Round to the nearest thousandth.
Currency units units units units units units units units
per per per per per per per per
1 USD 1 AUD 1 GBP 1 CAD 1 CNY 1 EUR 1 JPY 1 MXN
USD 001.00
AUD 001.33 1
GBP 000.82 1
CAD 001.35 1
CNY 006.91 1
EUR 000.94 1
JPY 115.28 1
MXN 019.68 1
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