Molly wants to buy a hoodie whilst on holiday in France. The price tag is labelled €59.99 and she would need to buy it with her debit card rather than cash. Her debit card charges a 2.85% transaction fee for all non-UK currency, and the exchange rate the card would use is £1.00 = €1.072
If she can buy the same hoodie back in the UK for a price of £52.00 which country should she buy the hoodie in if she wants to spend the least amount of money?
This is a very practical video outlining cost comparisons in different currencies. It is straight forward and takes most students only 2-3 minutes using a calculator. It is a good starter or consolidation problem, but normally needs an extension task for those who know immediately what to do.
Teachers could extend the learning by considering:
- My credit card charges no transaction fee, but the exchange rate is £1.00 = €1.068. If I decide to buy the hoodie in France (so I can wear it on holiday), which of my two cards should I use?
- What would I need the minimum debit card exchange rate to be if I wanted to buy the hoodie in France and pay the same as the UK price? Round your answer to 3 d.p.