Name:

Gr 10 Date: Time: 1𝟏𝟏 HR

𝟐𝟐
CAPS Reference
Finance & Growth
Topic Exchange Rates and Inflation

1. GOT IT! [10 MIN]

The exchange rate is the value of one currency converted to another currency.

Example 1:
You are planning to take a trip to America if the exchange rate is $1 = 𝑅𝑅14,52, how many $ will
you have if you have 𝑅𝑅1 800?
Remember
𝑅𝑅 1 800 ÷ 𝑅𝑅14,52 = $ 123, 97 For every 𝑅𝑅14,52 you get $1

∴ You have to divide to determine

how many 𝑅𝑅14,52 are there in
𝑅𝑅1 800.

Example 2:
Tom is planning to take a trip to Japan if the exchange is ¥1 = 𝑅𝑅6,37, how many 𝑅𝑅 will he need
to receive a ¥1 000?
Remember
¥ 1 000 × 𝑅𝑅6,37 = 𝑅𝑅 6370 For every 𝑅𝑅6,37 you get ¥1

∴ You have to multiply to

determine how many 𝑅𝑅6,37 you
need to receive ¥1 000.

2. GO AHEAD [35 MIN]

2.1 On the 21 January 2011, the exchange rate indicated that for $1 you will receive
𝑅𝑅7,07.
2.1.1 How many rand will you need to get $ 455?
2.2.2 How many dollar will you get for 𝑅𝑅566?

2.2 If the exchange rate is $1 = 𝑅𝑅13, 69 and the euro is € 1 = 𝑅𝑅11,52. Determine what
the exchange rate between the dollar and euro is.
2.3 The following represent the exchange rate between countries.
Currency Code Rand/ 1 unit
America Dollar USD 𝑅𝑅12,78
British Pond GBP 𝑅𝑅19,42
Japanese Yen JPY 𝑅𝑅10,11
Euro EUR 𝑅𝑅16,34
Australian Dollar AUD 𝑅𝑅14,89

2.3.1 Determine the amount of Rand you will need to receive 2 500 AUD.
2.3.2 Determine you how many JPY you will need to receive 10 EUR.
2.3.3 Determine the amount of Rand you will receive if you have 2 786 GBP.
2.3.4 Determine you how many USD you will get from 𝑅𝑅3 790.

2.4 An American family decided to have a holiday in Cape Town for a total of 10 days.
They have saved a total of $5 000. The family would like to have a package that
covers most of their expenses. The family got the following two quotes from two
hotels.

Hotel A
- 𝑅𝑅1 690, per day for the family
(including breakfast)
- Rental of a car, 𝑅𝑅360 per day
- Dinner will be a total of
𝑅𝑅1 500 per night per family.
Hotel B
- 𝑅𝑅1 790, per day for the family
(including breakfast)
- Rental of a car, 𝑅𝑅450 per day
- Dinner will be a total of 𝑅𝑅1 200 per
night per family.
- Entertainment for the 10 days will
be a total of 𝑅𝑅10 000

2.4.1 Determine the total of each hotel’s packages.

2.4.2 If the exchange rate is $1 = 𝑅𝑅14,20. Determine how many dollars will the
family have pay for Hotel A?
2.4.3 If the exchange rate is $1 = 𝑅𝑅14,20. Determine how many dollars will the
family have pay for Hotel B?
2.4.4 The family decide to take Hotel B’s package. What amount in rand will they
have left, if any, after they have paid the hotel?

3. CHECK YOUR WORK! [15 MIN]

4. GOT IT! [5 MIN]

Inflation is the rate at which goods and services are raised per year, due to economic
issues, political issues, and environmental shortages. To help us determine the inflation
rate we make use of the compound formula.
Formula: 𝑨𝑨 = 𝑷𝑷 ( 𝟏𝟏 + 𝒊𝒊)𝒏𝒏
𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹
𝐴𝐴 = 𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹𝐹 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎
𝑃𝑃 = 𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃𝑃 𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎𝑎
𝑟𝑟
𝑖𝑖 = 𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖𝑖 −>
100
𝑛𝑛 = 𝑡𝑡𝑡𝑡𝑡𝑡𝑡𝑡 𝑖𝑖𝑖𝑖 𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦𝑦

Example 1:

Bread cost R10,89. How much will the same bread cost in 3 years time, if inflations increased
yearly at 7,5%.

Answer:
𝐴𝐴 = ? 𝑃𝑃 = 10,89
𝐴𝐴 = 𝑃𝑃 ( 1 + 𝑖𝑖)𝑛𝑛
7,5 3 𝑖𝑖 =
7,5
𝑛𝑛 = 3
𝐴𝐴 = 10,89 � 1 + � 100
100
𝐴𝐴 = 𝑅𝑅 11,14

5. GO AHEAD [15 MIN]

5.1 An average car presently costs 𝑅𝑅180 000. Determine the future value of the same
type of car in five years’ time if the inflations rate is 7% p.a.

5.2 You are planning to buy a 3D-printer. You find a quote of 𝑅𝑅6 300 for the printer. If
inflation is at a rate of 13,5%, determine how much will you pay for the same 3D-
printer in 2 years’ time.
5.3 You have been shopping, and kept the receipt shown down below. If the inflation
rate is 8,3% p.a. Determine each item individual after a period of 5 years.
2lt Milk 𝑅𝑅30,79
6 Eggs 𝑅𝑅9,50
Smarties 𝑅𝑅7,01
1 kg of tomatoes 𝑅𝑅11,00

6. CHECK YOUR WORK! [10 MIN]

7. HELPFUL VIDEO

http://study.com/academy/lesson/exchange-rates-currency-conversion.html

https://www.youtube.com/watch?v=WDRhdtR96E0

https://www.youtube.com/watch?v=itoNb1lb5hY