Q:

What is the formula to convert currency?

A:

To convert currency, obtain the current exchange rate, and divide one by the rate. The resulting number shows the value of one unit of currency in relationship to another.

  1. Obtain the current exchange rate

    Find the exchange rate for the currency pair in question. Bloomberg provides a listing of pairings for major currencies.

  2. Divide one by the rate

    Divide one by the rate obtained in the previous step. The formula used in this step is that the Y-to-X exchange rate is equal to one divided by the X-to-Y exchange rate.

  3. Use the answer to determine the new rate

    Use the answer from the previous step to understand the value of one unit of the "Y" currency expressed in the "X" currency.


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