You return from Mexico with 2500 pesos. How much are they worth in U.S. dollars?
The Correct Answer and Explanation is:
Answer: ≈ $122.61 USD
explanation
- Locating an authoritative rate.
Foreign-exchange values move continuously, so we start by anchoring the calculation to a published figure that is as current as possible. Mexico’s Diario Oficial de la Federación (DOF) supplies the “FIX” rate used by banks, exporters, and customs agencies. For the business day closest to now (3 June 2025) it lists 20.3893 pesos per U.S. dollar. - Converting quotation format.
Rates on financial pages appear as “MXN per USD” (how many pesos buy one dollar). To turn pesos back into dollars you simply flip the quote: 1 USD=20.3893 MXN ⟹ 1 MXN≈0.0490 USD.1\text{ USD} = 20.3893\text{ MXN}\;\Longrightarrow\;1\text{ MXN} \approx 0.0490\text{ USD}. - Running the numbers. 2 500 MXN×0.0490 USD/MXN = 122.6133 USD.2\,500\text{ MXN}\times 0.0490\text{ USD/MXN} \;=\; 122.6133\text{ USD}. Rounded to the nearest cent, that is $122.61.
- Understanding spreads and fees.
The DOF figure is a mid-market benchmark—wholesale traders meet roughly halfway between the price at which they will buy pesos (“bid”) and the price at which they will sell them (“ask”). Retail outlets add a margin (often 1 %–3 %) plus any flat service charge. At a 2 % spread, the cash you actually receive could land near $120.15; at a pricey airport kiosk the take-home amount might slip below $119. - Volatility and timing.
The peso is the most actively traded Latin-American currency, influenced by oil prices, U.S. interest-rate expectations, and Mexican monetary policy. Over the past month it has traded between MXN 20.15 and MXN 20.65 per dollar—a ±1 % band. Waiting even a week can therefore shift a $2,500-peso redemption by a couple of dollars. - Practical tips.
Compare total costs, not just the headline rate: a slightly worse rate with zero commission can beat a great rate with a $10 fee. Using a debit card that reimburses international ATM charges, or loading a multi-currency travel card while rates are favorable, can lock in better value and reduce surprises when your statement arrives.
