If a u. s. importer can purchase 10,000 british pounds for $20,000, the rate of exchange is:

Question

Monica

Business

10 August, 14:25

If a u. s. importer can purchase 10,000 british pounds for $20,000, the rate of exchange is:

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Answers (1)

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Jeffrey · Answer 1

The answer is $2 = 1 British pound.

To calculate the rate of exchange, we will use a proportion method. If 10,000 British pounds is $20,000, then 1 British pound is x dollars:

10,000 British pounds : $20,000 = 1 British pound : x

The cross products are equal:

x * 10,000 British pounds = $20,000 * 1 British pound

x = $20,000 * 1 British pound : 10,000 British pounds

x = $2.

So, the exchange rate is $2 = 1 British pound.