Currency and Exchange Rate

Unit: 4

Book Icon Class 10: Mathematics

Currency, Money Exchange and Money Exchange Rate, Chain Rule, Currency Devaluation and Revaluation, Worked out SEE and example questions

Currency

Currency is the official money used in a country to buy goods and services. Every country has its own currency, with its own name and symbol. People use currency in the form of coins and notes.

Currencies of Some Countries

SN	Country	Currency Name	Symbol
1	United States	US Dollar	USD	$
2	United Kingdom	Pound Sterling	GBP	£
3	European Union	Euro	EUR	€
4	Japan	Japanese Yen	JPY	¥
5	China	Chinese Yuan Renminbi	CNY	¥ / 元
6	India	Indian Rupee	INR	₹
7	Canada	Canadian Dollar	CAD	C$
8	Australia	Australian Dollar	AUD	A$
9	Switzerland	Swiss Franc	CHF	CHF
10	Nepal	Nepalese Rupee	NPR	₨ / NPR

Money Exchange and Exchange Rate

What is Money Exchange?

When people travel to another country, they exchange their money for the currency of that country. This process is called money exchange. For example, if someone travels from Nepal to the USA, they must exchange Nepali Rupees (NPR) into US Dollars (USD). Money exchange is done at banks or money exchange counters.

What is Money Exchange Rate?

An exchange rate tells how much one currency is worth in another currency. It helps us convert one currency into another. Every day exchange rate can be viewed here by Nepal Rastra Bank.

📌 Things to Know:

Exchange rates can change daily.
Some places have buying rate and selling rate.

What are Buying Rate and Selling Rates?

1. Buying Rate:

The buying rate is the exchange rate that is used by financial institutions like banks to buy foreign currency. When you give foreign currency and get local money, the buying rate is used.

Note: When you have Foreign Currency, the bank is going to use the Buying Rate.

2. Selling Rate:

The selling rate is the exchange rate that is used by financial institutions like banks to sell foreign currency. When you give local money to get foreign money, the selling rate is used.

Note: When you have Nepalese Rupees, the bank is going to use the Selling Rate.

Solved SEE Questions

SEE 2080 LP - Currency Exchange Problem

📊 Question

Q1. On a day, the exchange rate of US $ 1 was NRs. 133.63.

a. How much Nepalese rupees can be exchanged with $1000? Find it. 1U

b. While Nepalese currency is devaluated by 1.5% as comparison to dollar, what will be the Nepalese rupees equal with $1? Find it. 1A

c. If Nepalese currency is revaluated by 1.5% instead of devaluation of 1.5% what would be the difference in Nepalese rupees while exchanging $1000? Find it. 2HA

💡 Solution

Given:
1 USD = NRs. 133.63
Devaluation rate = 1.5%, Revaluation rate = 1.5%

a. How much Nepalese rupees can be exchanged with $1000?

                                        US $1 = NRs. 133.63

                                        ∴ US $1000 = 1000 × 133.63

= NRs. 133,630

b. After 1.5% devaluation of Nepalese rupees:

When a currency is devaluated, the exchange rate increases (it takes more NRs to get 1 USD).

                                        New Rate = 133.63 + (1.5/100 × 133.63)

                                        = 133.63 + 2.00445

                                        = 135.63445

1 USD = NRs. 135.63 (approx) after devaluation

c. If revaluation of 1.5% happens instead of devaluation:

When currency is revaluated, the exchange rate decreases (it takes less NRs to get 1 USD).

                                        New Rate = 133.63 - (1.5/100 × 133.63)

                                        = 133.63 - 2.00445 = 131.62555

Now, calculate amount received in each case:

                                        After devaluation: NRs = $1000 × 135.63 = 135,630

                                        After revaluation: NRs = $1000 × 131.63 = 131,630

                                        Difference = 135,630 - 131,630

= NRs. 4,000

✅ Final Answers:

a. NRs. 133,630

b. NRs. 135.63 per USD (after 1.5% devaluation)

c. Difference = NRs. 4,000

Practice Questions

Test your knowledge

Attempt these questions independently to reinforce your learning:

Q1.

Prabin went to the bank to exchange US dollars in order to go abroad. According to the currency exchange rate on that day, the buying rate of 1 US dollar was NRs. 131.05 and the selling rate was NRs. 131.65. [CDC Model 2080]

a. How many dollars will he get in exchange of NRs. 1,57,980 Nepali rupees? [2A]
b. How many Nepali rupees will he get back from the exchanged dollars on the same day incase if he cannot go abroad due to family issue? [1A]
c. How much profit or loss will he get from this transaction? Write with reason? [1HA]

Q2.

According to the money exchange rate of a certain time, $ 1.28 = £ 1 and $ 1 = NRs. 132.84. [SEE 2080 MP]

a. How many American dollars ($) can be exchanged with NRs. 1,32,840? Find it. [1U]
b. How many pounds (£) can be exchanged with NRs. 15,600? Find it. [1A]
c. After the devaluation of Nepalese currency by 2% in comparison to American dollars, can more than NRs. 13,00,000 be exchanged with $ 10,000? Justify it. [1HA]