What is an exchange rate?
Even if you're not looking to trade some currency on the foreign exchange market, it's important to understand currency conversion rates. Suppose you're planning a vacation abroad; knowledge of currency rates can help you save money.
In layman's terms, an exchange rate is simply a price, which can be calculated:
exchange rate = 1/exchange rate
For instance, if 1 US dollar is equal to 117 Japanese yen, you could calculate the exchange rate as:
1/117 = .00854
Alternatively, if you know the exchange rate of USD to yen is .00854:
1/.00854 = 117
Therefore, you can calculate that 1 USD can buy 117 yen.
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1 comment:
Currency conversion is very important especially in sending money in other country, going out of town, and in business. Thanks for explaining what this really means, you explained it very well.
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