Finance

Foreign exchange

A tourist who changes money meets two bank rates, and the spread is the gap between them. The bank selling rate is what the tourist pays when the bank sells them currency, and the buying rate is what they receive when the bank buys currency from them.

CAPS

Grade 11 · Tourism · Finance

Tourism is one paper that mixes planning, money, people and place.

The paper
One NSC paper of 200 marks. It covers tourism sectors, map work and tour planning, foreign exchange, attractions, heritage and culture, marketing, communication and customer care, and sustainable and responsible tourism.
Calculations and service
Foreign exchange must show the currency, the rate, and whether you multiply or divide. A tour plan must fit the time and the map. Customer-care answers name what the tourist needed and what the staff member should have done.
How a marker reads it
A common mix-up is to multiply the visitor's 100 dollars by the selling rate and to give them R1 850 instead of R1 780.

The paper is 3 hours. A slogan with no link to the attraction, or a rand amount with no rate, does not score the application marks.

Worked theory

Worked theory. Say a visitor changes 100 dollars at a bureau in the Cape Town airport on 4 January, and say the bank buys a dollar at R17.80 and sells a dollar at R18.50. The bank selling rate is what a tourist pays to buy foreign currency, so a person buying dollars would pay R18.50 for each one. This visitor is converting dollars to rand and gets the bank's buying rate of dollars, R17.80, so 100 dollars becomes R1 780, not R1 850. The R70 gap is the bank's spread.

More worked examples

An aunt buying dollars in Rosebank
Say the same illustration is on the board in a Rosebank bank: the bank buys a dollar at R17.80 and sells a dollar at R18.50. An aunt buying 200 dollars for a trip pays the selling rate, because the bank is selling her the dollars. She pays R3 700, which is 200 times R18.50. If she had budgeted at the buying rate she would have brought only R3 560 and she would be R140 short at the counter. The direction of the trip decides which of the two rates is hers.
Fifty pounds at Menlyn
Say a visitor at a Menlyn bureau changes 50 pounds, and say the bank buys a pound at R22.00 and sells a pound at R23.40. The visitor wants rand, so the bank is buying the pounds and the visitor gets R22.00 each. Fifty pounds become R1 100, not R1 170. The R70 difference is the spread on that pile. Using the selling rate would overpay the visitor and wipe out the bank's gap.

In ordinary words

Say a bank buys one dollar at R17.80 and sells one dollar at R18.50. A traveller who is buying dollars pays the selling rate, because the bank is selling those dollars. A visitor who already holds dollars and wants rand is selling dollars to the bank, so the bank uses its buying rate and the visitor gets fewer rand. On one dollar the spread is the gap between those two prices, and on a pile of dollars that gap is the bank's earning.

In South Africa

A bureau at the Cape Town airport is where an arriving visitor meets the buying rate before they spend a rand.

Part 1 / 4

What it is

More worked examples

Board walkthroughs on this topic. Open one, copy the working, then try the next.

Example 1 / 20

Bank selling rate: R18,40 per US$. A South African buys $800 with 1,5% commission. Calculate total cost.

4. Step-by-step working

01
Multiply
800×18,40=R14 720.
02
Calculate
Commission 1,5%=R220,80; total R14 940,80.

How we got there

Read this like a teacher at the board. We go slowly, name every number, and say why we take each step.

Explain in another language · 11

1. What is the question asking?

Read the question twice. Circle the unknown. Underline every number and unit. The paper is asking: Bank selling rate: R18,40 per US$. A South African buys $800 with 1,5% commission. Calculate total cost.

Before any working — hunt first

Given

Numbers and units already in the sentence: R18,40 per · 800 with · 1,5%. Copy each one into a column. A name without a number is not given.

Missing

After you copy the given, the letter that still has no number is missing. The paper is pointing at: total cost. Circle that word — that is the missing variable.

Find

We are required to find: total cost. Write that as a symbol on the left, with a question mark, before you touch a formula.

Calculate

What we need to calculate: Multiply, add commission. Then substitute the given, one line at a time, to get total cost.

In other words — as if you have never seen this before

If you have never seen this before: Multiply, add commission. We will name a method in words, write the formula with no numbers, then substitute one line at a time.

2. What do we already know?

$800 × R18,40; 1,5%.

3. Which method — and why this one?

Multiply, add commission.

4. Step-by-step working

01 / 05
Multiply
800×18,40=R14 720.
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
02 / 05
Calculate
Commission 1,5%=R220,80; total R14 940,80.
Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.
03 / 05
Step G — Sense-check the size
Ask: is this the kind of number a Grade 10–12 paper would want? A speed of 3 000 ms for a learner walking, or a probability bigger than 1, means a unit or algebra slip. Estimate first: round the numbers and do the sum in your head.
Why this step: Markers write ‘unrealistic’ in the margin when the method is right but the size is wild. A 10-second head check often finds a missing 10² or a unit that never changed.
04 / 05
Step F — Box the answer with its unit
R14 940,80.
Why this step: A number without a unit is half a mark on a Physics paper, and a marker can miss a Maths answer that is buried in working.
05 / 05
Step H — What the marker is looking for
On an NSC memo you usually earn: (1) a method mark for naming the right formula or idea in words, (2) an accuracy mark for substituting the given numbers with units, (3) an accuracy mark for the boxed answer with its unit. Write those three lines even if you are unsure of the arithmetic — blank pages score zero.
Why this step: First-timers chase the final number and leave the method blank. The memo still pays out for the idea and the substitution even when the last line is wrong.

5. The answer

R14 940,80.

Copy onto your answer sheet — in this order

Answer: R14 940,80.

6. Check it like a marker

Selling rate used when buying foreign currency.

7. A trap first-timers fall into

First-timers often grab the first formula they remember, mix units (cm with m, minutes with seconds), or drop a minus sign. Write the formula in words first: “this equals that, because…”

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