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Question 25 of 30

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M:C:SPR:SET:A

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Problem Solving and Data Analysis

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Questions 25 and 26 refer to the following information.

An international bank issues its Traveler credit cards worldwide. When a customer makes a purchase using a Traveler card in a currency different from the customer’s home currency, the bank converts the purchase price at the daily foreign exchange rate and then charges a 4% fee on the converted cost.

Sara lives in the United States, but is on vacation in India. She used her Traveler card for a purchase that cost 602 rupees (Indian currency). The bank posted a charge of $9.88 to her account that included the 4% fee.

What foreign exchange rate, in Indian rupees per one U.S. dollar, did the bank use for Sara’s charge? Round your answer to the nearest whole number.

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Correct Answer: 
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63

$9.88 represents the conversion of 602 rupees plus a 4% fee on the converted cost. To calculate the original cost of the item in dollars, x:

table attributes columnalign right center left columnspacing 2px end attributes row cell 1.04 x end cell equals cell 9.88 end cell row x equals cell 9.5 end cell end table

Since the original cost is $9.50, to calculate the exchange rate r, in Indian rupees per one U.S. dollar:

table attributes columnalign right center left columnspacing 2px end attributes row cell 9.50 space dollars space cross times fraction numerator r italic space rupees over denominator 1 space dollar end fraction end cell equals cell 602 space rupees end cell row r equals cell fraction numerator 602 over denominator 9.50 end fraction end cell row blank almost equal to cell 63 space rupees end cell end table

Question Difficulty: 
medium
Objective: 

Students must use a linear equation to determine the conversion rate between two currencies.