By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
SunRiseSunRiseSunRise
Aa
  • NEWS
    NEWSShow More
    Elon Musk Alleges Google Censors Trump; Google, Calls it an Anomaly
    July 30, 2024
    NNPC announces recruitment exercise; portal experiences downtime.
    July 26, 2024
    FG deducts N100 billion from May’s revenue as the second tranche of funding for the Presidential Metering Initiative.
    July 26, 2024
    Black Market Dollar (USD) to Naira (NGN) Exchange Rate
    July 24, 2024
    Review of Daily Front Pages of Nigerian Newspapers
    July 22, 2024
  • TECHNOLOGY
    TECHNOLOGYShow More
    What are the uses of prismatic compass
    July 11, 2024
    Why You Should Use a VPN for Streaming
    Why You Should Use a VPN for Streaming
    July 10, 2024
    Best Music Streaming Service of 2024
    Best Music Streaming Service of 2024
    July 10, 2024
    Netflix Review: Our Top Choice in a Crowded Market (Nigerian Netflix Edition)
    Netflix Review: Our Top Choice in a Crowded Market (Nigerian Netflix Edition)
    July 9, 2024
    Long-Exposure Photography
    “Mastering Long-Exposure Photography: Techniques and Tips for Captivating Results”
    May 16, 2024
  • BUSINESS
    BUSINESSShow More
    10 Legit Ways to Raise Capital for Business in Nigeria
    10 Legit Ways to Raise Capital for Business in Nigeria | Sunrise Blog
    July 31, 2024
    how to make money on telegram in nigeria
    How to Make Money on Telegram in Nigeria: 13 Proven Strategies | Sunrise Blog
    July 31, 2024
    Make Money on Instagram in Nigeria
    How to Make Money on Instagram in Nigeria
    July 30, 2024
    How to Start Blogging in Nigeria and Succeed
    Ultimate Guide: How to Start Blogging in Nigeria and Succeed
    July 30, 2024
    Start Mini Importation From China to Nigeria in 5 Steps
    Start Mini Importation From China to Nigeria in 5 Steps
    July 30, 2024
  • SOCIAL MEDIA TIPS
    SOCIAL MEDIA TIPSShow More
    How to watch live match on phone
    July 15, 2024
    How to Check Your Airtel Number – Step-by-Step Guide
    July 15, 2024
    Mastering Meta AI on WhatsApp: A Step-by-Step Guide
    July 4, 2024
    How to Download TikTok Videos on Android and iOS Devices
    June 28, 2024
    How to Make Money on YouTube in Nigeria
    How to Make Money on YouTube in Nigeria
    June 13, 2024
  • EDUCATION
    • SCHOLARSHIP
    • STUDENTS UPDATE AND EDUCATION
    • GRANT
  • TRAVEL ABROAD
    TRAVEL ABROADShow More
    How to Work in Germany Without a Job Offer
    How to Work in Germany Without a Job Offer
    June 27, 2024
    UK Expands List of Companies Eligible to Sponsor Nigerians for Work Visas
    UK Expands List of Companies Eligible to Sponsor Nigerians for Work Visas
    May 27, 2024
    Teaching Jobs in Kuwait for Foreigners
    Teaching Jobs in Kuwait for Foreigners
    May 23, 2024
    Skill Shortage Jobs in Canada
    Skill Shortage Jobs in Canada – APPLY NOW
    May 23, 2024
    E-3 Visa Sponsorship Jobs in the USA
    E-3 Visa Sponsorship Jobs in the USA
    May 23, 2024
  • VISA SPONSORSHIP JOBS
  • ENTERTAINMENT
    • CELEBRITY NEWS
    • SPORTS
  • FASHION
  • FINANCIAL NEWS
Reading: How to Calculate Currency Exchange Rates – Easy Steps to Calculate an Exchange Rate | Currency Converter
Aa
SunRiseSunRise
Search
  • NEWS
  • TECHNOLOGY
  • BUSINESS
  • SOCIAL MEDIA TIPS
  • EDUCATION
    • SCHOLARSHIP
    • STUDENTS UPDATE AND EDUCATION
    • GRANT
  • TRAVEL ABROAD
  • VISA SPONSORSHIP JOBS
  • ENTERTAINMENT
    • CELEBRITY NEWS
    • SPORTS
  • FASHION
  • FINANCIAL NEWS
Have an existing account? Sign In
Follow US
  • Contact
  • About Us
  • Privacy Policy
© 2024 Sunrise . All rights reserved.
BUSINESS

How to Calculate Currency Exchange Rates – Easy Steps to Calculate an Exchange Rate | Currency Converter

Sunrise
Last updated: 2023/01/07 at 1:35 PM
Sunrise Published August 24, 2021

How to Calculate Currency Exchange Rates – When it comes to calculating the price of goods or services rendered physically is pretty straightforward and easier. You just multiply the number of times by their cost to arrive at as money value for the exchange.

When it comes to buying and selling currency, it is quite different from the normal we are so much familiar with. Trading currency requires a different method of calculation to arrive at an exchange rate, this can leave you worried and you will displace any thought of buying and selling currency, which can make you miss yielding investment opportunities.

Check this Trezor wallet login

How to Calculate Currency Exchange Rates

Taking time to understand and learn what currency exchange rate is worth, you will be exposed to it do you have plans to make a purchase abroad.

In this article, I will give a summary that will help you understand what is needed for you to do to achieve this.

How to Find Market Exchange Rates?

Read this post How to withdraw money from a trust wallet

Reading an exchange rate

When we talk about currency trading it simply means exchanging money for money. This requires the application of an exchange rate and whatever currency is used will create a pair

For example:  if USD dollars are used in buying British pounds, the exchange rate is USD/GBP for the pair.

To read the exchange rate, let’s say the USD/GBP is 1.05. This means it costs 1.05 British pounds to purchase 1US dollar.

The major currency is the first listed in the exchange quotes, and it always represents 1 unit of that currency.

However, the exchange rate simply displays how much of the second currency is needed to purchase 1 unit of the base currency.

Conversion spreads

In situations whereby you use banks, or other financial institutions to convert currencies a markup will be added to the market price, which allows them to make a profit.

This disparity between market price and the markup price is called conversion spread. To calculate the conversion spread, take the difference between the market exchange rate and the markup exchange rate and divide it by the market exchange rate.

If the market exchange rate is 1.25 GBP to buy 1 USD dollar (USD/GBP), and the bank or any other financial institutions, in general, is charging 1.30 GBP to buy 1 USD dollar, then the disparity is 0.05 (1.30 – 1.25).

Proceed to divide the difference by the market exchange rate (0.05/1.25), which equals 0.04.

Then multiply 0.04 by 100 (0.04 x 100) to get a conversion spread percentage of 4%.

The closer the exchange rate is to the market exchange rate, the more money you acquire.

How to calculate Currency exchange rates

There are two options to convert foreign currency, that is from the base and to the base.

When you are converting foreign currency from the base, you multiply by the exchange rate. So, if we need to convert 8 British pounds into US dollars, and the exchange rate is GBP/USD 1.20, then you multiply 8GPB x 1.20 per British pounds = 9.6 GBP

When you convert from the base simply divides by the exchange rate.

[ruby_related total=5 layout=5]

TAGGED: exchange rate calculator custom, exchange rate today, How to calculate Currency exchange rates, how to calculate exchange rate between three currencies, how to calculate exchange rate in excel, how to calculate exchange rate maths, how to calculate exchange rates yourself, how to do currency exchange, How to Find Market Exchange Rates?, step-by-step currency conversion
Previous Article Trezor wallet login Trezor wallet login – Official Trezor Shop | Can Trezor be Hacked?
Next Article View private friends list View private friends list (3 Smart ways) | How to See Someone’s Hidden Friends List on Facebook
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

© 2024 Sunrise . All rights reserved.
  • Contact
  • About Us
  • Privacy Policy
Welcome Back!

Sign in to your account

Lost your password?