UKC

exchange rate is £1 - $1.70

Commission of 1.5%
Fee of £6

When the bank is given pounds to change to US dollars it first deducts a fee from the amount tendered and then charges commission on the remaining amount. The remainder is converted into Dollars and given back.

Mr A obtains the amount of $850 dollars. How much Sterling did he start with?

What school of Mathematics/number jiggery does this fall into, is it arithmetic? I dont have any problems at all with the calculation, but it's constructing it that catches me out. Made a stupid mistake. (dividing by 1.015 instead of working out as 0.985 etc)

I need to massively improve my maths and it's this basic relation that I need to work on. I've bought myself a GCSE book but I have no interest in statistics, algebra etc. I just need to purely practice number wrangling.

Any books/resources anyone would recommend?

In reply to Kemics: You may have no interest in algebra, but learning some will improve your ability to formulate the required relationships substantially.

In reply to Kemics: I have to do this stuff all the time, and I'm rubbish too. I tend to use a spreadsheet to build a formula step by step.

I'm aware some people don't even understand the problem - my wife for one, she does this sort of stuff without thinking about it - but so long as I get a result I don't care.

In reply to Kemics: here's a good one..
http://www.telegraph.co.uk/earth/energy/windpower/10122850/True-cost-of-Bri...

In reply to Kemics: If you are a visual person you could draw a graph of the relationship. You might find that basic algebra helps. Making an estimate before you start is always a good idea.

As for resources try bbc bitesize and skillswise websites.

In reply to Kemics:

A basic accountancy book such as AAT might help if your problems are number related like this.

This is how I would approach the example above.

If Mr A was to ask for $850 from the broker he would need ($850/1.7) £500 + ((£500/.985) *1.5%) £7.61 + £6 = £513.61

then check it back £513.61-6= 507.61 - (507.61*1.5%) = 500 * 1.7 = $850

In reply to James_86:

Full marks for checking your answer is coorect.

In reply to Kemics:

I think you need to embrace algebra.

As commented above, this sort of problem is well described by an equation.

D = ((P - 6) * 0.985) * 1.7

Which you can just re-arrange to make P the subject (P = ....)

Worth knowing that the percent sign is just another way of writing a fraction.

75% is the same thing as 75/100. Percentages are fractions.

per means for each/every and cent is 100, so percent simply means for every 100.

Brilliant, thanks for the responses everyone.

Totally right about algebra, once I constructed it, much easier to make sense of. Though could someone explain to me why you multiply by .985 instead of dividing by 1.015. Mathematically dont they have the same effect? I understand they dont...but dont understand why?

In reply to Rick Graham:

Presume "coorect" is ironic as its not correct to equate non-equal things.

In reply to Kemics:

If you multiply x by 0.985 you get 98.5% of x. In other words x = 100%
If you divide x by 1.015 you get the amount which 100% would be if x = 101.5%

ie in the first example x = 100% and in the second example x = 101.5%

Not sure if that's clear?

In reply to Kemics:

Though could someone explain to me why you multiply by .985 instead of dividing by 1.015. Mathematically dont they have the same effect?

The inverse of multiplication by 985/1000 is multiplication by 1000/985.

But, 1000/985 is 1.015228..., not 1.015.

In reply to Kemics:

Sometimes just running the 'common sense' rule over an answer helps: did we expect the answer to go up or down (in the case of bank charges, expect the money to go one way !) and did they from your calculation ?

In reply to Kemics:


The best way to understand this is to consider largest difference.

Is multiplying by 0.5 the same as dividing by 1.5? Or, to go further: is multiplying by 0.1 the same as dividing by 1.9?

Or, to go yet further, is multiplying by 0 the same as dividing by 2?

You can now see what's happening and, with a bit of algebra you could construct a formula for the difference between (1 - x) and 1/(1 + x), which is actually the calculation in question.