MATHEMATICAL LITERACY GRADE 11 CAPS TOPIC 3 FINANCE

MATHEMATICAL LITERACY GRADE 11 CAPS TOPIC 3: FINANCE Section 3. 10: Exchange rates

Topic 3: Finance The following sections will be covered: 3. 1. Financial documents 3. 2. Tariff system 3. 3. Income, Expenditure, Profit/ Loss, Incomeexpenditure statements and budgets 3. 4. Cost price and Selling price 3. 5. Break-even-analysis and-

Topic 3: Finance 3. 6. Interest 3. 7 Banking 3. 8 Inflation 3. 9. Taxation (VAT and UIF) 3. 10. Exchange rates

Exchange Rates In section 3. 10, learners will be able to: § Estimate the value of a currency in relation to other countries. § Recognise the meaning of the terms ‘strong’ and ‘weak’ with regard to the relationship between different currencies. § Develop an understanding of the ‘buying power’ of a currency in a particular country.

Exchange rates � Currency is the system of money used in a particular country or region, such as dollar ($) in the USA, the rand (R) in South Africa, and the euro (€) in most of Europe. � An exchange rate is the value of one country’s currency in terms of another country’s currency. � Exchange rates change daily.

Strong/weak currency �A currency is said to be ‘’strong’’ when it is worth more, relative to other currencies i. e. when one unit of a currency trades for more units of another currency. � A currency is said to be “weak” when is less in value as compared to another currency � Countries with weak currency have much more higher levels of imports than exports. � Buying/Purchasing power of a currency means its unit of currency can buy more goods or service.

Exchange rates Estimating the value of other countries’ currencies � When estimating values of other currencies it is easier to work with rounded exchange rate value. � When doing actual exchange rate conversions for business purposes it is important to work with the full exchange rate value.

Example: 1 Use the forex (foreign exchange) rates below of 19 September 2011, to answer the following questions; 1. Forex Rate R/$: Rand per dollar 7. 67 R/€: Rand per euro 10. 49 R/£: Rand per pound 12. 04 R/CHF: Rand per Swiss Franc 8. 70 R/¥: Rand per yen 0. 10 What is the meaning of R/$ - 7. 67, R/€ - 10. 49?

Example: 1 cont. 2. A traveller from Chicago in the U. S. has 250 Us dollars. She wants to change these into rands on arrival on the 19 th September 2011 at the O R Tambo International airport. Estimate how many rands she will get. 3. A student from London in the United Kingdom is attending a conference in South Africa and he has £ 100. He wants to change them into rands. Estimate how many rands the student will get on the 19 th September 2011, 4. Estimate how many Swiss francs you would get if you have R 1 800? 5. Estimate how many rands a traveller from Tokyo in Japan would get if she were to change 500¥

Solutions: Example 1 �

Solutions: Example 1 �

Activity: 1 1. Use the table below to answer the following questions: Forex Rate R/$ 7. 67 R/€ 10. 49 R/£: 12. 04 R/CHF 8. 70 R/¥ 0. 10 (a) Estimate how many rands a traveller from Japan would get if she were to change 2000 Japanese yen.

Activity: 1 (b) (c) (d) Estimate how many US dollars you would get from the local Bureau de Change if you had R 6 400, 00. A tourist from Manchester in the United Kingdom is visiting South Africa and she has £ 350. She wants to change them to rands. Estimate how many rands the tourist will get. The average price of a house in Perth, West Australia, is listed as at A$ (Australian dollar). What is the rand value of this house if it is given that 1 Australian Dollar = R 7, 25431? Give answer to the nearest rand.

Solutions: Activity 1 �

Solutions: Activity 1 �

Activity: 2 1. Use the table below showing African foreign exchange rates to answer the questions in the next slide: Rand unit Forex rate R 1, 00 O, 94 Botswana pula R 1, 00 21 R 1, 00 12, 68 Kenyan shilling R 1, 00 0, 99 Lesoto loti R 1, 00 642, 51 Zambian kwacha R 1, 00 0, 75 Egyptian pound R 1, 00 2, 27 Ethiopian birr Nigerian naira

Activity: 2 1. If you had R 500, 00 calculate, using your estimate of the foreign exchange rate, how much of the following currencies you would receive from Bureau de Change (a) Botswana pula (b) Kenyan shilling (c) Egyptian pound 2. Estimate how many rands you would get if you have the following currencies: (a) 3 900 Kenyan shillings (b) 1 300 Zambian kwacha 3. What does a magazine that costs R 24 worth in Lesoto loti

Solutions: Activity 2 �

Solutions: Activity 2 �

Final Assessment Questions 110 Question 1 -5 Use the table below to answer questions 1 to 5 Forex Rate R/$: Rand per dollar 7. 67 R/€: Rand per euro 10. 49 R/£: Rand per pound 12. 04 R/CHF: Rand per Swiss Franc 8. 70 R/¥: Rand per yen 0. 10

Final Assessment Questions 110 Question 1 How much would your friend from the USA get if he had 375 US dollars and he wanted to change them to South African rand? A: R 375 -00 B: R 37 -50 C: R 3000 -00 D: R 300 -00

Question 2 How much would you get if you were visiting the USA and you wanted R 5000 -00 to be changed to US dollars? A: 500 dollars B: 625 dollars C: 6250 dollars D: 5000 dollars

Question 3 Which one was more expensive to buy and which one was least expensive to buy using a South African rand? A: € and CHF B: £ and CHF C: $ and ¥ D: £ and ¥

Question 4 How much would a traveler from Italy (Euro zone) get for her € 800 at the OR Tambo international? A: R 80 -00 B: R 800 -00 C: R 8000 -00 D: R 10 000

Question 5 If the exchange Rate was the only consideration which country would be more profitable for a South African to visit? A: Japan B: Any European country C: Britain D: Switzerland

Question 6 -10 Use the table below to answer questions 6 to 10 Rand unit Forex rate R 1, 00 O, 94 Botswana pula R 1, 00 21 R 1, 00 12, 68 Kenyan shilling R 1, 00 0, 99 Lesoto loti R 1, 00 642, 51 Zambian kwacha R 1, 00 0, 75 Egyptian pound R 1, 00 2, 27 Ethiopian birr Nigerian naira

Question 6 Which of the currencies can be said to be “strong” against the rand? A: The Zambian Kwacha B: The Kenyan shilling C: The Nigerian naira D: The Egyptian pound

Question 7 How much would a South African traveller get in exchange for R 120 -00 in Zambia A: 120 -00 kwacha B: 77 000 -00 kwacha C: 770 -00 kwacha D: 12 000 -00 kwacha

Question 8 You would have the same “buying power” in this country as you would in South Africa A: Lesotho B: Botswana C: Egypt D: Nigeria

Question 9 How much would a traveler from Ethiopia get in exchange for South African rand if he had 200 Ethiopian birr? A: R 200 -00 B: R 400 -00 C: R 2000 -00 D: R 4000 -00

Question 10 How much would the same traveler get on his way back to Ethiopia if he was left with only R 26 -00? A: 260 -00 birr B: 130 -00 birr C: 13 -00 birr D: 26 -00 birr

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Solutions: Final Assessment Questions C B D C A D B A B C