Question

A Bureau de change offers $1.568 per £ but charges a commission fee at £3. How many dollars (to the nearest cent) do you get for £75?

Answer 1

Hint: To convert one currency £ to other $. First deduct the commission you have to pay to perform the conversion from $ to £, and then convert the remaining amount by multiplying it with the exchange rate that is $1.568 per £ in this case.

Complete step by step solution:
Given in the question:
Commission fee for the conversion – £3.
Conversion rate \[\pounds1{\rm{ }} = {\rm{ }}\$ 1.568\] .
We have to convert a total £75 to $. So, let’s start by deducting the commission fee from the total amount we have to convert that is 3£ per conversion.
\[\therefore \pounds75 - \pounds3 = \pounds72\]
Now, we have the amount we have to convert finally that is \[\pounds72\] .
As per the conversion rate given in the question \[\pounds1{\rm{ }} = {\rm{ }}\$ 1.568\]. We have to multiply \[\pounds72\] with \[\$ 1.568\] to get the exact amount we can get.
\[ \Rightarrow 72 \times 1.568\]
\[ \Rightarrow 112.896\]
So, according to the conversion rate provided we will get 112.896$ for 75£ but it’s a pretty odd number.
As also mentioned in the question we should round this amount to the nearest possible amount that they can convert for us in cents that means only two digits after point.
\[ \Rightarrow 112.90\]
Here 112 are dollars and 90 are cents.

This means in total I will get 112$ and 90 cents for my conversion of 75£ after all the commission rate deduction and main conversion of 72£.

Note:
It’s a practical problem which we usually face while transferring money from one nation bank to another nation bank. We have to first deduct the commission and then convert the remaining amount by multiplying it with the current exchange rate.