# Foreign Exchange Calculator

In economics, the exchange rate is an essential price and can be analyzed.

In an X-Y rate of exchange for Z, we exclude a unit belonging to X, in which case, we receive Z number of units of Y in the end. If we’d also like to get the vice-versa, i.e., the rate of exchange of Y-X, the following simple formula for exchange rate can be employed.

Y to X exchange rate = 1 / X to Y exchange rate

The rate of exchange that we normally come across in the newspaper or hear in the radio or watch in the television is not really the rates for Y and X, but on the other hand, these are the rates for various other currencies.

They work in the same way though. For example on February 26, 2003 the US to Japan exchange rate was 117 yen, which means that you can purchase 117 Japanese yen in exchange for 1 US dollar. To know exactly how much in US dollars you will get in return for a Japanese Yen, you can utilize the following formula:

Japan to US exchange rate = 1 / US to Japan exchange rate
Japan to US exchange rate = 1 / 117 = 0.00854

With this, we get to know that one Japanese yen is worth .00854 US dollars. Even if the Canadian dollar (CAD) is worth 0.67 of a US dollar (USD), we get a CA – US rate of exchange of 0.67. To know exactly how many CADs you can purchase with a USD, you can use the simple formula below: