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52 views32 pages

Topic 3 Section 3.10 Exchange Rates

Uploaded by

seanc3674
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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MATHEMATICAL LITERACY

GRADE 11 CAPS

TOPIC 3: FINANCE

Section 3.10: Exchange rates


Topic 3: Finance
The following sections will be covered:
3.1. Financial documents
3.2. Tariff system
3.3. Income, Expenditure, Profit/ Loss, Income- and-
expenditure statements and budgets
3.4. Cost price and Selling price
3.5. Break-even-analysis
Topic 3: Finance
3.6. Interest
3.7 Banking
3.8 Inflation
3.9. Taxation (VAT and UIF)
3.10. Exchange rates
Exchange Rates
In section 3.10, learners will be able to:
 Estimate the value of a currency in relation to other

countries.
 Recognise the meaning of the terms ‘strong’ and ‘weak’ with

regard to the relationship between different currencies.


 Develop an understanding of the ‘buying power’ of a

currency in a particular country.


Exchange rates
 Currency is the system of money used in a particular
country or region, such as dollar ($) in the USA, the
rand (R) in South Africa, and the euro (€) in most of
Europe.
 An exchange rate is the value of one country’s

currency in terms of another country’s currency.


 Exchange rates change daily.
Strong/weak currency
 A currency is said to be ‘’strong’’ when it is worth
more, relative to other currencies i.e. when one unit of
a currency trades for more units of another currency.
 A currency is said to be “weak” when is less in value

as compared to another currency


 Countries with weak currency have much more higher

levels of imports than exports.


 Buying/Purchasing power of a currency means its unit

of currency can buy more goods or service.


Exchange rates
Estimating the value of other countries’ currencies
 When estimating values of other currencies it is easier

to work with rounded exchange rate value.


 When doing actual exchange rate conversions for

business purposes it is important to work with the full


exchange rate value.
Example: 1
Use the forex (foreign exchange) rates below of 19
September 2011, to answer the following questions;

Forex Rate

R/$: Rand per dollar 7.67

R/€: Rand per euro 10.49

R/£: Rand per pound 12.04


R/CHF: Rand per Swiss Franc 8.70

R/¥: Rand per yen 0.10

1. What is the meaning of R/$ - 7.67, R/€ - 10.49?


Example:1 cont.
2. A traveller from Chicago in the U.S. has 250 Us dollars. She wants to
change these into rands on arrival on the 19th September 2011 at the O
R Tambo International airport. Estimate how many rands she will get.
3. A student from London in the United Kingdom is attending a
conference in South Africa and he has £100. He wants to change them
into rands. Estimate how many rands the student will get on the 19th
September 2011,
4. Estimate how many Swiss francs you would get if you have R1
800?
5. Estimate how many rands a traveller from Tokyo in Japan would
get if she were to change 500¥
Solutions: Example 1
1. R/$ - 7.67 means 1 US dollar was worth R7,67, i.e. 1 Us
dollar is approximately worth R8,00
R/€ - 10.49 means 1 euro was worth R10,49, i.e. 1 euro was
worth R10,50.
2. 1 US dollar ($) = R7,67 R8,00

250 US dollars 250 8 = R2 000,00


3. 1 £ = R12,04 R12,00
100 £ 100 12 = R1 200,00
4. 1 Swiss franc R9,00
R1 800 is worth 1 800 9 = 200 Swiss francs.
Solutions: Example 1

5. 1 Japanese yen = 10 cents


500 Japanese yen = 500 10 cents
= 5 000 cents
= R50,00
Activity: 1
1. Use the table below to answer the following questions:

Forex Rate
R/$ 7.67

R/€ 10.49

R/£: 12.04
R/CHF 8.70
0.10
(a) EstimateR/¥how many rands a traveller from Japan
would get if she were to change 2000 Japanese yen.
Activity: 1
(b) Estimate how many US dollars you would get from
the local Bureau de Change if you had R6 400,00.
(c) A tourist from Manchester in the United Kingdom is
visiting South Africa and she has £350. She wants to
change them to rands. Estimate how many rands the
tourist will get.
(d) The average price of a house in Perth, West Australia,
is listed as at A$ (Australian dollar). What is the rand
value of this house if it is given that 1 Australian
Dollar = R7,25431? Give answer to the nearest rand.
Solutions: Activity 1
1. (a) 1 yen (¥) = 10 cents
2000 yen (¥) = 2000 10
= 20 000 cents
= R200,00
(b) 1 US Dollar = R7,67 R8,00
R6 400,00 = 6 400 8 = 800 US Dollars
(c) 1 £ = R12,04 R12,00
350 £ = 350 12 = R4 2000,00
Solutions: Activity 1
(d)1 A$ = R7,25431
A $ 495 000 = 7,25431 495 000
= R3 590 883,45
= R3 590 883
Activity: 2
1. Use the table below showing African foreign exchange
rates to answer the questions in the next slide:

Rand unit Forex rate


R1,00 O,94 Botswana pula
R1,00 21 Nigerian naira
R1,00 12,68 Kenyan shilling
R1,00 0,99 Lesoto loti
R1,00 642,51 Zambian kwacha
R1,00 0,75 Egyptian pound

R1,00 2,27 Ethiopian birr


Activity: 2
1.If you had R500,00 calculate, using your estimate of the
foreign exchange rate, how much of the following currencies
you would receive from Bureau de Change
(a) Botswana pula
(b) Kenyan shilling
(c) Egyptian pound
2. Estimate how many rands you would get if you have the
following currencies:
(a) 3 900 Kenyan shillings
(b) 1 300 Zambian kwacha
3. What does a magazine that costs R24 worth in Lesoto loti
Solutions: Activity 2
1. (a) R1,00 = 0,94 Botswana pula
1 Botswana pula
R500,00 500 Botswana pula
(b) R1,00 = 12,68 Kenyan shillings
13 Kenyan shillings
R500,00 500 13 Kenyan shillings
6 500 Kenyan shilling
(c) R1,00 = 0,75 Egyptian pound
1 Egyptian pound
R500,00 500 Egyptian pound
Solutions: Activity 2
2. (a) R1,00 = 12,68 Kenyan shillings
13 Kenyan shillings
3 900 Kenyan shilling = 3 900 13 = R300,00
(b) R1,00 = 642,51 Zambian Kwacha
642
R1 300 Zambian Kwacha = 1300 642
= R2,00
3. R1,00 = 0,99 Lesoto loti
R24 Jacket = 24 0,99
= 23,76 Lesoto loti
Final Assessment Questions 1-10

Question 1-5

Use the table below to answer questions 1 to 5

Forex Rate

R/$: Rand per dollar 7.67

R/€: Rand per euro 10.49

R/£: Rand per pound 12.04


R/CHF: Rand per Swiss Franc 8.70

R/¥: Rand per yen 0.10


Final Assessment Questions 1-10

Question 1

How much would your friend from the USA get if he


had 375 US dollars and he wanted to change them
to South African rand?

A: R375-00
B: R37-50
C: R3000-00
D: R300-00
Question 2
How much would you get if you were visiting the USA and
you wanted R5000-00 to be changed to US dollars?

A: 500 dollars
B: 625 dollars
C: 6250 dollars
D: 5000 dollars
Question 3
Which one was more expensive to buy and
which one was least expensive to buy using a
South African rand?

A: € and CHF

B: £ and CHF

C: $ and ¥

D: £ and ¥
Question 4
How much would a traveler from Italy (Euro
zone) get for her € 800 at the OR Tambo
international?
A: R80-00

B: R800-00

C: R8000-00

D: R10 000
Question 5
If the exchange Rate was the only consideration which
country would be more profitable for a South African
to visit?

A: Japan

B: Any European country

C: Britain

D: Switzerland
Question 6-10
Use the table below to answer questions 6 to 10

Rand unit Forex rate


R1,00 O,94 Botswana pula
R1,00 21 Nigerian naira
R1,00 12,68 Kenyan shilling
R1,00 0,99 Lesoto loti
R1,00 642,51 Zambian kwacha
R1,00 0,75 Egyptian pound

R1,00 2,27 Ethiopian birr


Question 6
Which of the currencies can be said to be “strong”
against the rand?

A: The Zambian Kwacha


B: The Kenyan shilling
C: The Nigerian naira
D: The Egyptian pound
Question 7
How much would a South African traveller get in
exchange for R120-00 in Zambia

A: 120-00 kwacha

B: 77 000-00 kwacha

C: 770-00 kwacha

D: 12 000-00 kwacha
Question 8

You would have the same “buying power” in


this country as you would in South Africa

A: Lesotho

B: Botswana

C: Egypt

D: Nigeria
Question 9
How much would a traveler from Ethiopia get
in exchange for South African rand if he
had 200 Ethiopian birr?
A:R200-00

B: R400-00

C: R2000-00

D: R4000-00
Question 10
How much would the same traveler get on his way
back to Ethiopia if he was left with only R26-00?

A: 260-00 birr

B: 130-00 birr

C: 13-00 birr

D: 26-00 birr
Solutions: Final Assessment
1. C
Questions
2. B
3. D
4. C
5. A
6. D
7. B
8. A
9. B
10. C

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