Module 9: Foreign money

Module objectives Provide an opportunity to look at the learner outcomes in the ‘Manage money’ element of the numeracy component of the National Literacy and Numeracy Framework (LNF) in order to identify where teaching learners about calculating with foreign currency exists in the curriculum in Wales. Highlight resources and activities that can be used in Key Stages 3 and 4 to develop learners’ numeracy skills in the context of calculating with foreign currency. Note: Differentiation, extension ideas and effective questioning will often be suggested in the notes within the PowerPoint for teachers/trainers to use as required.

Learner aims The module introduces the process of calculating using exchange rates and using foreign money. Learners will be able to: appreciate the different places/ways to buy foreign money carry out calculations using a given exchange rate understand and demonstrate the real-life process of foreign exchange.

The National Literacy and Numeracy Framework (LNF) The National Literacy and Numeracy Framework (LNF) focuses on four strands of numeracy: Strand 1: Developing numerical reasoning Strand 2: Using number skills Strand 3: Using measuring skills Strand 4: Using data skills. This slide and the next three slides provides the information about where teaching learners about foreign currency exchange rates exists within the LNF. 4

Numeracy component of the LNF Strand: Using number skills Elements: Use number facts and relationships Fractions, decimals, percentages and ratio Calculate using mental and written methods Estimate and check Manage money 5

LNF learner outcomes The following table shows the learner outcomes as specified in the numeracy component of the LNF. The focus in this module is the topic of foreign money and the specific learner outcomes are highlighted in bold. The numeracy component of the LNF can be viewed at www.learning.wales.gov.uk/resources/nlnf.

calculate using foreign money and exchange rates Manage money Learners are able to: Year 7 use profit and loss in buying and selling calculations understand the advantages and disadvantages of using bank accounts, including bank cards make informed decisions relating to discounts and special offers. Year 8 carry out calculations relating to VAT, saving and borrowing appreciate the basic principles of budgeting, saving (including understanding compound interest) and borrowing. Year 9 calculate using foreign money and exchange rates understand the risks involved in different ways of saving and investing describe why insurance is important and understand the impact of not being insured. Extension use and understand efficient methods of calculating compound interest understand and demonstrate the real-life process of foreign exchange understand and calculate income tax.

What is an exchange rate? Why do exchange rates exist? Foreign money Starter activity: What is an exchange rate? Possible learner responses could include the following. An exchange rate is the price of one currency in terms of another. An exchange rate is the equivalence between two different currencies. Exchange rates exist because there is a demand for other currencies in order to purchase goods and services from other countries with the corresponding currency. Why do exchange rates exist?

Foreign money and exchange rates Discussion activity: Where can you purchase foreign money? Do they all offer the same exchange rate? Possible learner responses to the question ‘Where can you purchase foreign money?’ could include: banks Post Office travel agent bureau de change. Learners can investigate the exchange rates online from their suggested places. Many of these have an online conversion calculator to carry out exchanges. Learners will notice that exchange rates are often given to 4 decimal places. Learners can also discuss why not every place has the exact same exchange rate. They could look at how the exchange rate changes over a fixed period (e.g. a month or a year).

Adding up to a lifetime www.addinguptoalifetime.org.uk This is a free online resource which follows four characters and how they deal with financial situations. It is suitable for Key Stage 3 to Key Stage 5. The package is approximately 25 hours of learning activities which learners can complete online. It is presented as 5 modules: Life as a student (aged 14 upwards) Working life Relationships New life Active retirement. The modules offer the whole range of manage money topics. www.addinguptoalifetime.org.uk Each module has an audio tutorial which can be listened to in English or Welsh.

Adding up to a lifetime The module ‘Life as a student’ explores a variety of topics. Visit www.addinguptoalifetime.org.uk, click ‘Menu’ and choose the topic ‘Holidays’. The resource covers budgeting for a holiday, destinations, money (currency) and insurance. The work can support the development of learners’ literacy and numeracy skills and any project work on holidays. The ‘Life as a student’ module explores the advantages and disadvantages between travellers cheques, foreign currency and credit cards, and how these can be used abroad.

Calculating with exchange rates Country Currency Rate (per £) Euro zone Euro 1.17 USA US Dollar 1.54 Egypt Egyptian Pound 10.82 Japan Japanese Yen 151.15 Turkey Turkish Lira 2.97 Discussion ideas: Offer learners a selection of currency rates (example of five shown above, correct at time of writing). Learners can look online for the current exchange rate. Can they convert £400 (for example) into each of the currencies listed above? More details given on following slides. Extension: understanding and demonstrating the real-life process of foreign exchange The discussion leads to a real-life context when learners are encouraged to investigate the online exchange rates and notice that different organisations offer a different rate. The exchange rates above are given to 2 decimal places. Are they always given to 2 decimal places online? What is commission and why do some places offer 0% commission? Are learners able to identify which is the ‘best deal’ when buying foreign currency? Do organisations offer the same ‘buy’ exchange rate as the ‘sell’ rate? If you buy £400 worth of euros for your holiday and bring home £90 to sell back to a particular organisation, do you have the same exchange rate? Depending on the focus of the lesson, learners can have a discussion about which countries are in the euro zone and use the euro as their currency. (Euro zone countries: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia and Spain.)

Country Currency Rate (per £) For every pound I get 1.17 euros. Country Currency Rate (per £) Euro zone Euro 1.17 USA US Dollar 1.54 Egypt Egyptian Pound 10.82 Japan Japanese Yen 151.15 Turkey Turkish Lira 2.97 For every pound I get just over one and a half times as many US dollars. Discussion ideas: Encourage learners to describe/explain what the ‘rate per pound’ means in words. Typical responses could include the following. For every one pound I get 1.17 euros. For every one pound I get just under 3 turkish lira, so for 2 pounds I would get almost 6 Turkish lira. Different currencies can be used. This could also be used as a classroom display. Encouraging learners to explain in words what the rate per £ means will help them decide the calculation to be carried out in order to work out the answer to, e.g. How many euros will you receive for £500? For every pound I get just under 3 Turkish lira.

Currency signs Country Currency symbol Euro zone Euro € USA US Dollar A currency sign is a graphic symbol used as a shorthand for a currency’s name, and used to represent an amount of money. Where is the sign located – at the end or the front of the numbers? When writing an amount of money the position of the symbol varies by currency. Also some currencies use a decimal point and others use a comma. Country Currency symbol Euro zone Euro € USA US Dollar United Kingdom Pound Sterling £ Discussion ideas: Learners can investigate which countries share the same symbol, and how amounts are written in euros, dollars and pounds using the symbol and decimal point or comma. $ 14

Banknotes and coins Currency Symbol We also use Euro € c (for cents) Discussion idea: How many pence in one pound? How many cents in one US dollar? How many cents in one euro? Discussion idea: Is there a £3 note? Or a 25¢ coin? What is the highest coin available in euros? Currency Symbol We also use Euro € c (for cents) US Dollar ¢ (for cents) Pound Sterling £ p (for pence) Learners can investigate what coins and notes are in circulation in a chosen currency. They can do some equivalences, e.g. 100p in £1, two 50p coins in £1, five 20p coins in £1. They can do this with other currencies to improve knowledge and numeracy skills. $ 15

Country Currency Coins Notes Euro zone Euro €2, €1, 50c, 20c, 10c, 5c, 2c and 1c €500, €200, €100, €50, €20, €10, €5 USA US Dollar 1$, 50¢, 25¢, 10¢ and 1¢ $100, $50, $20, $10, $5, $2, $1 Learners can investigate what coins and notes are in circulation in a chosen currency. Two examples are given above. In a real-life context, when simulating the purchase of foreign currency online, learners may notice that the amount will possibly be rounded to the nearest note or coin. This may or may not include commission. Learners can investigate what 1 euro or 1 dollar is worth in sterling. In this case they would have to use the inverse process of multiplication and recognise that to calculate what 1 euro is worth using an exchange rate they need to divide. Example: €1 = 85p (using the rate €1 = £1.17, calculation is 1 ÷ 1.17 = 0.85) 16

Calculating with exchange rates Use the given exchange rates to calculate the amount of currency you would have for £400. Encourage learners to think also about the approximate values they could use to carry out the calculation. Country Currency Rate (per £) Approximate Euro zone Euro 1.17 1 (or 1.2) USA US Dollar 1.54 1.5 Egypt Egyptian Pound 10.82 10 (or 11) Japan Japanese Yen 151.15 150 Turkey Turkish Lira 2.97 3 Exchange rates correct at time of writing. Note: The approximate value can be used as a quick technique for real-life scenarios, e.g. to convert your holiday money. The values in brackets are rounded to the nearest 1 decimal place or nearest whole.

Calculating with exchange rates Use the given exchange rates to calculate the amount of currency you would have for £400. Encourage learners to think also about the approximate values they could use to carry out the calculation. Currency Rate (per £) Approximation Amount for £400 Euro 1.17 1.2 x 400 = 480 1.17 x 400 = 468 US Dollar 1.54 1.5 x 400 = 600 1.54 x 400 = 616 Egyptian Pound 10.82 11 x 400 = 4400 10.82 x 400 = 4328 Japanese Yen 151.15 150 x 400 = 60000 151.15 x 400 = 60460 Turkish Lira 2.97 3 x 400 = 1200 2.97 x 400 = 1188 Development of numeracy and ICT skills Are learners able to recognise that a multiplication calculation is required? If they are able to articulate what £1 = €1.17 means to them, then they should be encouraged to identify the multiplication process for themselves. Learners can decide how good their approximations were. Why were the approximate values higher/lower than the accurate calculation? Learners can set up a spreadsheet to carry out calculations for approximate and accurate values, and then change the amount of sterling they want to convert. Extension: understanding and demonstrating the real-life process of foreign exchange Discussion idea: Do organisations offer a ‘better rate’ if you want to convert a higher amount of sterling?

Calculating with exchange rates Finley went on a trip to New York. He changed £750 into dollars ($) when the exchange rate was £1 = $1.54. How many dollars did he receive? In New York, Finley purchased a new camera for $199. Using the same exchange rate, calculate the cost of this camera, giving your answer to the nearest pound. (c) When Finley returned home he changed $115 back into pounds (£), when the exchange rate being offered was £1 = $1.64. How much did he receive? Extension Was it in Finley’s favour that the exchange rate being offered was $1.64 instead of $1.54 when he changed his dollars back to pounds? Give an explanation to support your answer. Solution 750 x 1.54 = $1155 $199 ÷ 1.54 = £129.22 (£129 to the nearest pound) $115 ÷ 1.64 = £70.12 (£70 to the nearest pound). Extending learners’ understanding Was the different exchange rate in Finley’s favour now that it was $1.64 instead of $1.54? Possible learner responses could include the following. The exchange rate is not in his favour as he has to use ‘more’ dollars to each one pound he gets back. No, by the higher the exchange rate (for £1) Finley will get less sterling for his US dollars. No, because he received $1.54 for £1, and now has to pay $1.64 to get £1. No, because it is $0.1 more expensive for every pound. Change the question by varying the amount converted, the cost of items purchased, the exchange rates given in parts (a) and (c).

Calculating with exchange rates Eurocamping prices (charges per night) Per person 5 euros Tent plot (small) 4 euros Tent plot (large) 6 euros Electricity 10 euros Pets 2 euros Solution Price for 2 persons per night: 10 euros Price for 2 nights: 10 x 2 = 20 euros Cost of small tent for 2 nights: 8 euros Total cost: 20 + 8 = 28 euros Total cost in pounds: 28 ÷ 1.13 = £24.77876 (£24.78 to nearest penny) Differentiate the question by varying the requirements, change the currency, change the costs presented in the table and/or ask learners to design their own questions. Olivia and James share one tent and stay for two nights at the Eurocamping campsite. They changed pounds into euros for an exchange rate of 1.13 euros to the pound. Calculate the cost, in pounds, of their two-night stay in a small tent with no electricity.

Foreign exchange and modern foreign languages Ideas for learners: Produce a restaurant/café menu with prices converted from real-life prices. Cost a holiday from the website of a campsite or European theme park in the chosen foreign language. Where prices are given in euros, part of the task is to work out the price in sterling. Convert the cost to purchase items from an online website where prices and information are given in the foreign language being taught. Compare pocket money and spending activities of learners from a different country, or compare salaries in euros with the equivalent occupations in sterling. This is not an exhaustive list of ideas. The activity can form part of a main task that is being delivered in the modern foreign language lesson. Opportunities to develop numeracy skills by converting between euros and sterling can complement the main activity.

Websites and resources The following can be used to support work on foreign currency. www.nationwideeducation.co.uk Finance Skills: games, factsheets* and worksheets* for learners aged 4 to 18+ (printable resources and online games). * Welsh versions available. www.Addinguptoalifetime.org.uk The modules offer the whole range of manage money topics including budgeting. www.pfeg.org pfeg (Personal Finance Education Group) is an independent charity providing a wealth of resources to support financial education in schools. www.xe.com/currencyconverter Exchange rates and free currency converting apps available.