The exchange rate of U.S. dollars to British pounds (£) is 0.63. You have $4000 to convert to British pounds. How many British pounds will you receive? A) £2520 B) £6349 C) £4063 D) £3937. With an explanation, please, because my answer that I got isn’t on here.
The Correct Answer and Explanation is:
To solve this problem, we need to convert U.S. dollars (USD) to British pounds (GBP) using the given exchange rate.
Given:
- Exchange rate: 1 USD = 0.63 GBP
- You have: $4000 USD
Step-by-step calculation:
Multiply the amount of U.S. dollars by the exchange rate:4000×0.63=25204000 \times 0.63 = 25204000×0.63=2520
So, $4000 USD is equal to £2520 GBP.
Correct answer:
A) £2520
Explanation:
An exchange rate tells you how much one unit of a currency is worth in terms of another currency. In this case, each U.S. dollar is worth 0.63 British pounds. To convert from dollars to pounds, you multiply the amount in dollars by the exchange rate.
Many people make the mistake of dividing instead of multiplying or reversing the rate (thinking 1 GBP = 0.63 USD). That would give an incorrect result and possibly lead to an answer not listed among the choices. For example, if you mistakenly divided 4000 by 0.63, you would get about 6349, which is actually one of the options (choice B) but is incorrect in this context. That figure represents how many U.S. dollars you’d need to get £4000, not the other way around.
Always pay attention to the direction of the conversion. Since the question asks how many British pounds you’ll get for your U.S. dollars, and you’re given the rate in terms of USD to GBP, you should multiply.
This kind of problem is very common in travel or finance scenarios, so understanding how exchange rates work is important for accurate budgeting and currency conversion.
