In both your professional lives and personal lives, you may need to convert one currency to another. Maybe you have already done this personally, if you have traveled internationally. The conversion may have been physical: handing in your dollars and receiving euros in exchange. Or it may have been virtual: buying a meal in a Danish restaurant with a credit card and seeing the charge, along with the exchange rate, on your statement.

In business, a company may use a manufacturing facility in one country but sell products in other countries. Say you pay a Chinese manufacturer in Chinese yuan but receive US dollars from customers. To get a unified financial picture--how much more you are taking in than spending or vice versa--you need to do an exchange calculation.

Currency Math

There is no special currency math. Conversion from Japanese yen to British pound is simply a matter of multiplication or division. You all know how to multiply and divide. So the key skill is knowing when to do which one!

Tip: don't try to memorize "rules" about whether to multiply or divide. Instead, keep the currency units (e.g., dollars, euros, yen) written out in your calculations to make sure that your answer ends up in the currency you want. This video shows two examples.

Exercises

This module gives you a series of exercises to practice working with multiple currencies.

Unit conversion (where the units are currencies) is the central mathematical skill in this module. Another essential math skill is calculating percentage change. This video gives a concise blackboard explanation of percentage change:

We also ask you to make some graphs in this module. The first time of graph is a line graph that shows a trend over time. This video is a reasonably quick demo of creating and labeling a line graph in Excel. Note that in your version of Excel, the navigation, menu options, etc. will be different, so don't try to follow along click for click.

Another graph type in this module is a scatter plot, a graph that lets you see the relationship between two variables. Here's another nice (and quick!) demo. The caveat applies here too: there are a lot of versions of Excel, and your version will surely have some differences.

It's a little more correct to do the time trend graph with a connected scatter plot, but when the dates in a time series are essentially evenly spaced, a line graph is quicker (even if mildly imprecise).