Question

Many nations compare the value of their currency to the US dollar. On a day early in 2009, $1 CDN (1 Canadian dollar) was worth $0.8290 USD (US dollar). This is known as an exchange rate. On the same date $1 USD could be used to buy 0.7579 Euros or 0.6709 UK pounds (United Kingdom pounds Sterling).

Demonstrate and explain how the above exchange rates could be used to create composite functions to convert Canadian dollars to Euros or UK pounds. (4 marks)

I am planning a trip to Portugal, Spain and France with a side trip to England. Using your composite functions, determine how many Euros I could get for $1000 CDN and how many UK pounds for $500 CDN. (2 marks)

Answer 1

You can take any two currency exchange rates and divide them by each other to get 1:

for example

1 CDN = $0.829
Dividing both sides by 1 CDN

1 CDN / 1 CDN = 1 = $0.829/1 CDN

Since you can multiply anything by 1 and still get the same result (1*x = x); You can multiply by the correct ratio to convert currency.

For example

1 CDN = 1 CDN * ($0.829 / 1CDN ) * (0.7579 EU / $1)

The dollars and CDN units will cancel giving

1 CDN = 0.829 * 0.7579 Euros

Do something similar to convert Canadian dollars to UK pounds