Steps to Determine the Currencies Exchange Rate and Its Calculation

Written by: Steps To Faculty
Thursday, May 20th, 2010

---

If you are into international travel or foreign business, you should be familiar with the currencies exchange rate. How to determine the currencies exchange rate? For this you should know the value of the dollars and currency of the country you will be visiting. You can follow the simple steps listed below:

Step 1 Contact the State Department

Research the country’s currency of your visit. You can contact your travel agent or the State Department of the country can help you with the name and the three letter abbreviation of the currency you will need (e.g. USD for American dollars).

Step 2 Find the value of existing currency

Try to find out the existing value of your domestic currency. Then find out the current value of your planned currency in dollars based upon the chart that the state department will supply you with. You can also Visit XE.com for the current values of the main world currencies. You can find them in the chart displaying the value of the currencies in dollars.

Step 3 Compute using proportions

You can make use of the proportion and cross multiply them to calculate the conversions from dollars to other currencies. Proportions are expressed as two fractions connected by an equal sign. Make sure that the same currency is in the numerator of both fractions. For example, if you find that USD $1 equals CAN$0.987, then you can express the two as a ratio and calculate the total value of the domestic money into the foreign currency. Hence, if you were converting USD$500, then you would have CAN$493.50. In like manner, calculate the answer by multiplying the denominator of the first fraction, 0.69 Euros, by the numerator of the first fraction, $10. The answer is 6.9 Euros equals $10.

No matter whatever is the exchange rate, this is the method to calculate the dollars. Therefore, with a calculator you can easily determine the currencies exchange rate.