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How to Calculate Currency Exchange Value

Posted by at 4:19 AM Read our previous post

1. Check the official exchange rate before you travel. Although this value will fluctuate slightly as the day goes on, it's a good idea to know the approximate rate someone should quote you. Visit an exchange site like XE.com or or oanda.com, or search Yahoo! or Google for '1 USD in EUR,' '1 USD in GBP' or with the abbreviation of any currency to which you want to convert.
2. Ask the money changer the rate he can offer you before you hand him your bills. If you visit a commercial money changer at an airport or in the tourist district of a city, he'll have a board with exchange rates posted. If you give him your money before asking the rate, however, you're implicitly agreeing to it, no matter how good or bad it actually is.
3. Calculate the value of your currency exchange by comparing the money changer's rate with the published one. If Google, for example, told you that 1 USD = .759 EUR, but the money change wants to offer you only .685 euros for each dollar, you can calculate the value of his exchange as follows: .685/.759 = 90 percent. In this situation, he's giving you only 90 percent of what your dollars are worth. Another way to think of this is that for every dollar you give him, you're losing 10 cents simply because of his rate.
4. Visit other money exchange counters if you're not satisfied with your first rate, completing similar calculations to determine their value relative to one another. Change your money with the counter offering the best value.

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