Presentation on theme: "Topic 8 – Financial Math:"— Presentation transcript:
1 Topic 8 – Financial Math: Exchange ratesIB Math Studies
2 Buying and selling rates Exchange rates atFirst Cape BankIf a customer has US$200 and she wants Euro:$1 USBuyingSelling0.650.62Euro1.101.06Aus $1.951.88Yen9896Use the selling price.If a customer has 5000 Yen and he wants US$:Use the buying price.First note the difference between the buying and the selling rates. This is how the bank makes part of it’s profit.
3 Using exchange rates Exchange rates at First Cape Bank $1 US Buying a) Calculate how many Aus$ will she have when she exchanges all her US$.$1 USBuyingSelling0.650.62Euro1.101.06Aus $1.951.88Yen9896b) On returning to the US she has Aus$250 left. How many US$ will she have after exchanging them at the bank?2. Sam arrives in the US with £460 and exchanges all this with the bank into US$. How many US$ will he have?1. Lidia is going on holiday to Australia. She is taking US$1200 as spending money.
4 Commission ratesBanks may also charge a commission rate, this is a sum for performing the exchange.Percentage chargeThe Seconds Bank offers an exchange rate of £1=$1.66 with a commission rate of 2.2%. Calculate how many $ you would receive for £350.This could be a fixed charge or as a percentage charge of the exchange rate.Fixed rateThe First Bank offers an exchange rate of £1=$1.64 with a fixed rate of £5 per transaction. Calculate how many $ you would receive for £350.
5 Questions1. Convert £300 into $ at a rate of £1=$1.56 with a fixed commission rate of £5.4. Convert $300 into £ if $1=£0.68 and the bank charges $3 commission.£201.962. A bank exchanges $ at a commission rate of 1.5%.Convert $500 into Yen at a rate of $1=95 Yen.5. A bank buys $ for £1=0.59 and sells for £1=0.57, with a 1.7% commission charge.Alfie has £870, how many $ will he receive?3. A bank buys Euros at $0.9 and sells at $0.86. Calculate how many Euros a customer with $400 will receive.$344 Euros