How to Complete a Cross-Rate Currency Conversion Table
Many people have shopped in a foreign country and have been confused by the prices. From purchasing food to buying souvenirs, we usually make our buying decisions in terms of our home currency. We have established mental parameters as to the value of goods and services based on our understanding of what things cost in our home currency. For many of us, that is the U.S. dollar. But it is easy to make the transition quickly by simply understanding a foreign currency's worth as compared to the dollar, and this can be accomplished with a simple multiple currency rate conversion table.
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Instructions
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1
Determine the exchange rate. Many newspapers publish exchange rates for major foreign currencies. Note the value of $1 in the foreign currency. Online sources are also available.
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2
Create a chart with two columns. Label one column "USD" and the second column the code for the foreign currency, e.g. GBP for Great Britain pounds. Other currencies may be added in additional columns.
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3
On the first line in the USD column, enter "1", representing one USD. Going down the same column, enter "2," "3," "4," "5," "10," "25" and "50."
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4
Enter the exchange rate from Step 1 in the second column and next to the "1" in the USD column. This will represent the value of $1 in the foreign currency. Then multiply this value times each of the USD values and enter them in the adjoining column. You know have a currency exchange rate sheet and guide. For other values, simply mentally add or subtract using the base numbers in your chart. For example, $35 will represent the sum of the foreign currency values next to $25 and $10.
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5
It is also useful to create a second chart reversing the columns, with the first column showing the foreign currency units. Instead of U.S. dollars, head the column with the foreign currency code, and then follow with the values of "1," "2" and so on. Then divide $1 by the exchange rate to determine the reverse value. Using this rate, multiply each foreign currency denomination in column one to determine the U.S. dollar equivalent in column two.
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Tips & Warnings
Keep the guide in your pocket for quick reference when shopping or eating at a restaurant.
Some currencies have units so small that one unit is not meaningful. In this case (Step 5) use the lowest reasonable multiple unit. For instance, Japanese yen base unit should be 50, since one yen is so small.
Rates fluctuate daily, but unless there is considerable activity in the currency markets (rare) the conversion sheet should be valid for weeks, and useful for casual business and pleasure travel.
Banks or money exchangers usually offer rates slightly lower than the official rate to compensate for their services. If you want to create a more exact conversion chart to cover these costs, use this rate instead of the official exchange rate.
Be careful where you exchange money. Some private establishments may charge excessive commissions, while individuals on the street may hawk better rates. The latter may be illegal and land you in trouble with the authorities.
References
- Photo Credit Foreign Currency image by Stephanie Mueller from Fotolia.com
