Question

Suppose that you are in Singapore with 10,000 Singapore dollars (SGD) and you want to exchange them for euros for your trip to Paris. The exchange shop gives you the following rates: Commission: 1%

USD/SGD = 1.2375

EUR/USD = 1.2800.

How many euros will you get for your Singapore dollars?

Answer 1

You want to exchange 10,000 Singapore dollars (SGD) to Euros and

Exchange rates are given

USD/SGD = 1.2375

EUR/USD = 1.2800

Multiplying these two we get,

(USD/SGD)*(EUR/USD) = EUR/SGD = 1.2375*1.2800 = 1.584

Therefore, 1 EUR = 1.584 SGD

1 SGD = (1/1.584) EUR = 0.631313

Now, the exchange shop charges 1% as commission. So commission charged = 1% * 10000 SGD = 100 SGD

So, you are left with 10000 - 100 = 9900 SGD

9900 SGD = 9900 * 0.631313 EUR = 6250 EUR

Answer -> 6250 EUR