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.
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:
1.04*x=9.88
x=9.5
Since the original cost is $9.50, to calculate the exchange rate r, in Indian rupees per one U.S. dollar:
9.5 * r = 602 rupees
r = 602/9.5 = 63 rupees
