Q:

What is the formula to calculate exchange rates?

A:

Quick Answer

The formula for calculating exchange rates is to multiply when exchanging from base currency to a secondary currency, and to divide when vice-versa. Therefore, if the EUR/USD exchange rate is 1.30 euros, and $100 is to be converted into euros, the formula is $100 divided by 1.3, giving 76.92 euros.

Continue Reading

Full Answer

Exchange rate quotes are typically given for a base currency. If money needs to be changed into a secondary currency, then the formula follows the multiplication route. For example, if the EUR/USD exchange is $1.30, and 100 euros is the funds to exchange, then $130 is received in return. Quotes for currency exchange are always given in pairs, so it is relatively straightforward to exchange money from one currency to another.

Learn more about Currency & Conversions

Related Questions

Explore