Q:
What Is the Formula to Convert Currency?
A:
Quick Answer
To convert currency, obtain the current exchange rate, and divide one by the rate. The resulting number shows the value of one unit of currency in relationship to another.
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Full Answer
- Obtain the current exchange rate
Find the exchange rate for the currency pair in question. Bloomberg provides a listing of pairings for major currencies.
- Divide one by the rate
Divide one by the rate obtained in the previous step. The formula used in this step is that the Y-to-X exchange rate is equal to one divided by the X-to-Y exchange rate.
- Use the answer to determine the new rate
Use the answer from the previous step to understand the value of one unit of the "Y" currency expressed in the "X" currency.
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