Question

The Ruiz Family is exchanging euros for US dollars. The exchange rate is 1 euro equals 1. 35261 USD. Since the Ruiz family knows that USD are stated to the nearest hundredth of a dollar, they used the conversion ratio [1. 35/ 1 euro unit]. Will this give the Ruiz family the correct exchange? Explain

Answer 1

Answer:

No, the Ruiz family will not get the correct exchange rate.

Explanation:

Given:- 1 euro = 1.35261 USD

To Find:- Whether the ruiz family will get the correct exchange rate.

Solution:-

According to the question, 1.35261 USD will be rounded to the nearest hundredth, so it will become 1.35 USD.

Let's suppose the family has 100 euros.

Then the Original exchange rate will be

1 euro = 1.35261 USD

So, 100 euros = 100 × 1.35261 = 135.261 USD.

But the Rounded exchange rate will be

1 euro = 1.35 USD

So, 100 euros = 100 × 1.35 = 135 USD.

It seems insignificant as it is small, because it is only 0.261 USD, but the more money they convert with this rate, the more incorrect they will be. If they exchange 1 million euros to dollar with the rounded off rate, they will loose a lot of money.

So, the Ruiz family will not get the correct exchange rate.