How to Convert Between Currencies
To convert currency, multiply the amount by the exchange rate written as units of the currency you want per one unit of the currency you have.
The Currency Conversion formula
Calculator
Convert an amount at a rate quoted as target currency per unit of your own, then flip the rate to go back.
The sum in your starting currency, dollars in this example.
Units of the currency you want per 1 unit of the currency you hold.
A foreign-priced item, such as a jacket tagged at 90 euros.
$600 at 0.8 per unit becomes 480 units of the target currency.
- Reverse rate (1 divided by the rate)
- 1.25
- Foreign price tag in your own currency
- $112.5
- Rate direction
- Your currency buys less than one unit
One unit of the target currency costs $1.25, so dividing by 0.8 does the same job as multiplying by 1.25.
A tag of 90 in the target currency costs $112.5 at home.
A rate below 1 means the converted number must come out smaller than what you started with.
How to calculate Currency Conversion, step by step
- 1Write the rate in the right direction. Quote the rate as units of the currency you want per one unit of the currency you are giving up.
- 2Multiply. Amount in the target currency = the amount you hold × that rate.
- 3Flip the rate to go back. The reverse rate is 1 divided by the original rate, so dividing by the rate does the same job as multiplying by its reciprocal.
- 4Sanity check the size. If one unit of your currency buys less than one unit of the other, the converted number should come out smaller, not larger.
Worked example: Currency Conversion
Take an illustrative rate of 1 dollar = 0.80 euros. Converting $600 gives 600 × 0.80 = 480 euros. Going the other way, the reverse rate is 1 ÷ 0.80 = $1.25 per euro, so 480 euros × 1.25 = $600, the amount you started with. A jacket priced at 90 euros therefore costs 90 × 1.25 = $112.50.
Currency Conversion questions
How do you convert dollars to euros?
Multiply the dollar amount by the euros-per-dollar rate. At an illustrative 0.80 euros per dollar, $600 becomes 480 euros.
Do you multiply or divide by the exchange rate?
Multiply when the rate is quoted as the currency you want per unit of the currency you hold, and divide when it is quoted the other way round.
Why do two quotes for the same pair look different?
They are reciprocals of each other, so 0.80 euros per dollar and $1.25 per euro describe the same rate. Check which currency sits on the per-one-unit side before you calculate.
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