Currency Conversion

This formula converts money by multiplying the starting amount in the original currency by the exchange rate quoted in target-currency units per 1 unit of the base currency. If the rate says how many foreign units you get for one domestic unit, then multiplying gives the equivalent value in the new currency. It works because exchange rates are proportional conversion factors, just like inches-to-centimetres or kilometres-to-miles.

Use this when converting prices, wages, budgets, or account balances from one currency to another. It is especially useful when reading exchange rates in travel, e-commerce, finance, and international trade.

• Using the rate the wrong way round and dividing when you should multiply
• Mixing up which currency is the base currency and which is the target currency
• Forgetting to match the units in the exchange rate, such as USD per GBP versus GBP per USD