1. Produced by MEI on behalf of OCR © OCR 2013 Introduction to Quantitative Methods Changing to and from foreign currency

2. Produced by MEI on behalf of OCR © OCR 2013 Information available When changing to or from foreign currency you will usually know how much £1 is worth in the currency. To cover costs and make a profit, money changers do one of the following –Charge a fee for changing money –Use slightly different rates depending on whether they are changing to or from the currency.

3. Produced by MEI on behalf of OCR © OCR 2013 Changing Euros £1 = €1.196 This means that each pound is worth 1.196 euros. A euro has 100 cents (similar to a pound having 100 pence) so it is not possible to get €1.196. This value is used for calculations but final amounts are rounded to the nearest penny (or cent)

4. Produced by MEI on behalf of OCR © OCR 2013 Changing from pounds £1 = €1.196 This means that each pound is worth 1.196 euros. If you want to change £170 (say) then you will get 170 lots of 1.196 euros 170 x 1.196 = €203.32 To avoid having to keep coins in foreign currency, some places would ask customers to get exactly €200 and pay a bit less in pounds.

5. Produced by MEI on behalf of OCR © OCR 2013 Changing to pounds £1 = €1.196 This means that each pound is worth 1.196 euros. You don’t know how much one euro is worth in pounds so it is a bit less straightforward to work out how to change euros to pounds than for pounds to euros

6. Produced by MEI on behalf of OCR © OCR 2013 Scaling to change € to £ Euros1.1961196130 Pounds11000 It is difficult to work with an amount in euros which is not a whole number. Multiplying by 1000 will give a whole number. Suppose you want to change €130 to pounds  1000

7. Produced by MEI on behalf of OCR © OCR 2013 Scaling to change € to £ Euros1.19611961130 Pounds110000.8361.. It would be useful to know what 1 euro is worth  1196

8. Produced by MEI on behalf of OCR © OCR 2013 Scaling to change € to £ Euros1.19611961130 Pounds110000.8361..108.70 Now you are ready to get the final answer, rounding to the nearest penny  130

9. Produced by MEI on behalf of OCR © OCR 2013 Finding what €1 is worth You can use the idea of multipliers to find out what €1 is worth in pounds. £ = €1 £1 = €1.196  1.196 You know what 1.196 euros are worth so dividing by 1.196 will give what 1 euro is worth in pounds.

10. Produced by MEI on behalf of OCR © OCR 2013 Finding what €1 is worth You want to know what €130 is worth. £ = €130 £0.836… = €1  130 €130 is worth £108.70 to the nearest penny.

11. Produced by MEI on behalf of OCR © OCR 2013 Using division to change € to £ £1 = €1.196. What is €130 worth in pounds? Imagine putting €1.196 into a purse; the contents are worth £1. Repeat until all the money is in purses. The number of purses is 130  1.196 = 108.6956… €130 is £108.70 to the nearest penny.