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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$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:
Since the original cost is $9.50, to calculate the exchange rate r, in Indian rupees per one U.S. dollar:
Students must use a linear equation to determine the conversion rate between two currencies.