Currency conversion reasoning: guide and free practice

Convert currencies by tracking the direction of the quoted rate, then apply any stated fees in the specified currency and order.

Write the units

If US$1 buys GBP 0.80, multiply dollars by 0.80 to obtain pounds. To move in the opposite direction, divide pounds by 0.80. Thinking in units avoids memorising a multiply-or-divide rule that breaks when the quote reverses.

Separate the conversion and the fee

A fixed fee in the receiving currency is subtracted after conversion. A fee in the sending currency may reduce the amount available to convert. The question must state the order: a fee of 2% of the converted amount differs from a flat charge of two currency units.

Compare offers on the final amount

A more attractive headline rate may produce less money after fees. Calculate the amount actually received for each offer using the same original transfer. Do not compare rates with different quote directions until you put them on a common basis.

Cross rates

If A converts to B and B converts to C, multiply the two conversion factors, cancelling the intermediate unit. If the answer is a cost in the original currency, reverse the entire chain carefully.

Keep practice separate from live rates

Every rate below is a fictional exercise value, not a current quote or financial recommendation. Keep enough precision during intermediate steps and round only when the item asks for a final amount. The problems test interpretation and arithmetic rather than knowledge of exchange markets.

Your first practice session

Use the fictional rates supplied in each question. Ignore unstated charges. Apply fees in the stated currency and order; these are not live exchange quotes.

Try 10 questions with explanations

Worked examples

  1. 1. At US$1 = GBP 0.80, how many pounds are received for US$450 with no fee?
    1. GBP 320
    2. GBP 360
    3. GBP 450
    4. GBP 562.50

    Reference: q-abce3f68-73 · Report this question

    Show answer and solution

    Answer: B. GBP 360

    Multiply dollars by pounds per dollar: 450 times 0.80 = GBP 360.
  2. 2. At GBP 1 = US$1.25, how many dollars are needed to buy GBP 320 with no fee?
    1. US$256
    2. US$350
    3. US$400
    4. US$420

    Reference: q-50193ce7-76 · Report this question

    Show answer and solution

    Answer: C. US$400

    Each pound costs US$1.25. Therefore 320 times 1.25 = US$400.
  3. 3. At EUR 1 = US$1.10, how many euros does US$660 buy with no fee?
    1. EUR 660
    2. EUR 726
    3. EUR 550
    4. EUR 600

    Reference: q-33152468-64 · Report this question

    Show answer and solution

    Answer: D. EUR 600

    Reverse the quoted direction: euros = 660/1.10 = EUR 600.

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About this practice

These are independently written teaching questions. A practice score helps you review your answers; it is not a validated hiring prediction or an official employer score.