Question

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Horace is seeking to exchange money in preparation for his trip to Uruguay. He will need 5,000 Uruguayan pesos, and the exchange rate between the US dollar and the Uruguayan peso is 1:19.924. The currency exchange agent Horace is using requires that a 5% fee be paid once the currency conversion has occurred. Taking the fee into account, how many US dollars will it take Horace to get 5,000 pesos? Round to the nearest cent.

A. $274.62

B. $249.05

C. $250.95

D. $238.41

Answer 1

The US dollars taken by Horace to get  5,000 pesos is $274.62. Therefore the correct option is (A).

What is exchange rate?

Exchange rate refers to the rate of the exchange from one currency to the other. The exchange rate is fixed in the case of the use of the gold or any other standard.

According to the given question, Horace need 5,000 Uruguayan pesos and requires 5% surcharge. This implies that he will get only 95% of the money for the exchanges.

                                 = (0.95)(19.924)

                                 = 18.9278

In order to get 5000 Uruguayan pesos The amount of the dollar received is calculated as follows-:

                                  5000 = (x)(18.9278)

here x is the number of dollars.

                                   5000 = (x)(18.9278)

                                         x  = 5000/ 18.9278

                                          x =   $274.62

                                 

Therefore the correct option is (A).

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