All skills Math

Learn Index · Financial Literacy and Consumer Mathematics Grade 9–10

Currency exchange

Changing one country’s money into another’s using a rate.

Read

Different money, different values

Countries use different currencies: the Canadian dollar (CAD), US dollar (USD), euro (EUR), British pound (GBP), Japanese yen (JPY) and many more. Currency exchange converts one into another using an exchange rate.

Reading an exchange rate

An exchange rate tells how much of one currency equals one unit of another.

Example (illustrative): 1 CAD = 0.73 USD. Equivalently, 1 USD ≈ 1.37 CAD.

Rates change every day with markets, so always check current rates.

Converting

CAD to USD: multiply by the USD-per-CAD rate.

$500 CAD × 0.73 = $365 USD

USD to CAD: divide by 0.73 (or multiply by 1.37).

$200 USD ÷ 0.73 ≈ $274 CAD

Check with units: CAD × (USD/CAD) = USD. The units tell you whether to multiply or divide.

Buy and sell rates

Banks and exchange counters use two rates:

Rate When Better for you?
Sell rate they sell you foreign currency you get less foreign money
Buy rate they buy foreign currency back from you you get fewer dollars back

The difference is the spread, which is how exchangers make money. Some also charge a fee.

Example: A bank sells USD at 1.40 CAD per USD and buys USD at 1.34 CAD per USD.

  • Buy $300 USD: 300 × 1.40 = $420 CAD
  • Sell it back unused: 300 × 1.34 = $402 CAD
  • Loss from the spread: $18

Cards abroad

Credit cards usually convert at a market rate plus a foreign transaction fee (often about 2.5%).

Example: A €80 meal; rate 1 EUR = 1.50 CAD; 2.5% fee.

80 × 1.50 = $120 → × 1.025 = $123 CAD

Comparing prices across countries

A jacket costs $150 USD in the US or $189 CAD in Canada. With 1 USD = 1.37 CAD:

150 × 1.37 = $205.50 CAD → the Canadian price is lower (before taxes and shipping).

Worked examples

Example 1: 1 CAD = 110 JPY. Convert $250 CAD. → 27,500 JPY.

Example 2: 1 GBP = 1.85 CAD. Convert £40. → $74 CAD.

Example 3: 1 CAD = 0.68 EUR. Convert €102 to CAD. → 102 ÷ 0.68 = $150 CAD.

Common mistakes

  • Multiplying when you should divide. Check the units.
  • Ignoring fees and the spread.
  • Using an old rate.

Try it yourself

  1. 1 CAD = 0.72 USD. Convert $800 CAD.
  2. 1 USD = 1.38 CAD. Convert $45 USD.
  3. A bank sells EUR at 1.52 CAD and buys at 1.45 CAD. You buy €200 and later sell it all back. Loss?
  4. 1 CAD = 17 MXN (Mexican pesos). Convert 2,040 MXN to CAD.

Answers: 1) $576 USD 2) $62.10 CAD 3) $14 4) $120 CAD

Quick recap

  • An exchange rate links two currencies; rates change daily.
  • Multiply or divide using units as a guide for conversion.
  • The sell rate, buy rate and fees affect the real cost.