1. Pay and exchange rates
A rate compares two quantities, such as money per hour or one currency per unit of another. An hourly rate of pay is the money earned for each hour worked.
An exchange rate says how much of one currency you get for one unit of another. Work out first whether the answer should be a bigger or a smaller number. Then multiply or divide to match.
pay = hourly rate × number of hours
dollars ÷ dollars per euro = euros
Examiner insight
Worked example 12 marks
Do not use a calculator. The exchange rate is 1 euro = 1.25 dollars. Maya changes 400 dollars into euros. How many euros does she receive?
- 1
One euro is worth more than one dollar, so the answer is smaller than 400. Divide: 400 ÷ 1.25 [1]
- 2
400 ÷ 1.25 = 320 euros [1]