Money & Finance · Lesson 11 of 14

Currency Conversion with a Given Rate

An exchange rate tells you how much of one currency equals one unit of another. Multiply to go one way and divide to go back.

Secondary
Updated 14 November 2026

What you will learn

Use an exchange rate to convert in both directions.
Decide whether to multiply or divide.
Check that answers are sensible.

Before you start: you should be able to multiply and divide decimals. See Tax on a Price.

The idea

An exchange rate compares two currencies. The rate in this lesson, £1 = €1.20, is an invented example. Real rates change every day, so always use the rate you are given.

A conversion table for the example rate. Each pound is worth 1.20 euros.

Which way?

You get more euros than pounds, so going from pounds to euros the number gets bigger: multiply by $1.20$ . Going back, divide by $1.20$ .

£50 is worth €60 at the example rate. The euro amount is bigger because each euro is worth less.

Check

After converting, ask: should my number be bigger or smaller? If you multiplied when you should have divided, the answer will look wrong.

Worked examples

Example 1: Pounds to euros

Convert £50 at £1 = €1.20.

$50 \times 1.20$ .
$= 60$ .

Answer: €60

Example 2: Euros to pounds

Convert €90.

$90 \div 1.20$ .
$= 75$ .

Answer: £75

Example 3: Price abroad

A souvenir costs €6. What is that in pounds?

$6 \div 1.20 = 5$ .

Answer: £5

Tip: say the rate as a sentence: “one pound is one point two euros”. Then decide whether your answer should grow or shrink.

Why it matters

Holidays, online shopping and international business all need conversions. Always check which rate and which direction. This lesson uses an invented rate.

Practice

Your turn. Type or choose an answer, then press Check. Getting one wrong is fine, that is what practice is for. You can try as many times as you like.