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Foreign exchange rates - (not in caps, included for completeness)

Is $500 ("500 US dollars") per person per night a good deal on a hotel in New York City? The first question you will ask is “How much is that worth in Rands?". A quick call to the local bank or a search on the Internet (for example on (External Link) ) for the Dollar/Rand exchange rate will give you a basis for assessing the price.

A foreign exchange rate is nothing more than the price of one currency in terms of another. For example, the exchange rate of 6,18 Rands/US Dollars means that $1 costs R6,18. In other words, if you have $1 you could sell it for R6,18 - or if you wanted $1 you would have to pay R6,18 for it.

But what drives exchange rates, and what causes exchange rates to change? And how does this affect you anyway? This section looks at answering these questions.

How much is r1 really worth?

We can quote the price of a currency in terms of any other currency, for example, we can quote the Japanese Yen in term of the Indian Rupee. The US Dollar (USD), British Pound Sterling (GBP) and the Euro (EUR) are, however, the most common used market standards. You will notice that the financial news will report the South African Rand exchange rate in terms of these three major currencies.

Abbreviations and symbols for some common currencies.
Currency Abbreviation Symbol
South African Rand ZAR R
United States Dollar USD $
British Pounds Sterling GBP £

So the South African Rand, noted ZAR, could be quoted on a certain date as 6,07040 ZAR per USD (i.e. $1,00 costs R6,07040), or 12,2374 ZAR per GBP. So if I wanted to spend $1 000 on a holiday in the United States of America, this would cost me R6 070,40; and if I wanted £1 000 for a weekend in London it would cost me R12 237,40.

This seems obvious, but let us see how we calculated those numbers: The rate is given as ZAR per USD, or ZAR/USD such that $1,00 buys R6,0704. Therefore, we need to multiply by 1 000 to get the number of Rands per $1 000.


$ 1 , 00 = R 6 , 0740 1 000 × $ 1 , 00 = 1 000 × R 6 , 0740 = R 6 074 , 00

as expected.

What if you have saved R10 000 for spending money for the same trip and you wanted to use this to buy USD? How many USD could you get for this? Our rate is in ZAR/USD but we want to know how many USD we can get for our ZAR. This is easy. We know how much $1,00 costs in terms of Rands.

$ 1 , 00 = R 6 , 0740 $ 1 , 00 6 , 0740 = R 6 , 0740 6 , 0740 $ 1 , 00 6 , 0740 = R 1 , 00 R 1 , 00 = $ 1 , 00 6 , 0740 = $ 0 , 164636

As we can see, the final answer is simply the reciprocal of the ZAR/USD rate. Therefore, for R10 000 will get:

R 1 , 00 = $ 1 , 00 6 , 0740 10 000 × R 1 , 00 = 10 000 × $ 1 , 00 6 , 0740 = $ 1 646 , 36

We can check the answer as follows:

$ 1 , 00 = R 6 , 0740 1 646 , 36 × $ 1 , 00 = 1 646 , 36 × R 6 , 0740 = R 10 000 , 00

Six of one and half a dozen of the other

So we have two different ways of expressing the same exchange rate: Rands per Dollar (ZAR/USD) and Dollar per Rands (USD/ZAR). Both exchange rates mean the same thing and express the value of one currency in terms of another. You can easily work out one from the other - they are just the reciprocals of the other.

Questions & Answers

Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
what school?
biomolecules are e building blocks of every organics and inorganic materials.
anyone know any internet site where one can find nanotechnology papers?
Damian Reply
sciencedirect big data base
Introduction about quantum dots in nanotechnology
Praveena Reply
what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
how to know photocatalytic properties of tio2 nanoparticles...what to do now
Akash Reply
it is a goid question and i want to know the answer as well
characteristics of micro business
for teaching engĺish at school how nano technology help us
Do somebody tell me a best nano engineering book for beginners?
s. Reply
there is no specific books for beginners but there is book called principle of nanotechnology
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
fullerene is a bucky ball aka Carbon 60 molecule. It was name by the architect Fuller. He design the geodesic dome. it resembles a soccer ball.
what is the actual application of fullerenes nowadays?
That is a great question Damian. best way to answer that question is to Google it. there are hundreds of applications for buck minister fullerenes, from medical to aerospace. you can also find plenty of research papers that will give you great detail on the potential applications of fullerenes.
what is the Synthesis, properties,and applications of carbon nano chemistry
Abhijith Reply
Mostly, they use nano carbon for electronics and for materials to be strengthened.
is Bucky paper clear?
carbon nanotubes has various application in fuel cells membrane, current research on cancer drug,and in electronics MEMS and NEMS etc
so some one know about replacing silicon atom with phosphorous in semiconductors device?
s. Reply
Yeah, it is a pain to say the least. You basically have to heat the substarte up to around 1000 degrees celcius then pass phosphene gas over top of it, which is explosive and toxic by the way, under very low pressure.
Do you know which machine is used to that process?
how to fabricate graphene ink ?
for screen printed electrodes ?
What is lattice structure?
s. Reply
of graphene you mean?
or in general
in general
Graphene has a hexagonal structure
On having this app for quite a bit time, Haven't realised there's a chat room in it.
what is biological synthesis of nanoparticles
Sanket Reply
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
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