PSAT Math Grid-Ins Question 144: Answer and Explanation

Question: 144

A currency conversion store at an airport in New York City posts the following conversion rate table.

Currency Type	Currency per 1 U.S. Dollar
U.S. dollar	1.00
Euro	0.90
Indian rupee	68.01
South African rand	16.17
Japanese yen	116.36
Australian dollar	1.41

The conversion store charges 1 percent of the amount converted plus a $2 flat fee for each total transaction (including multiple-currency exchanges as long as they take place in a single visit to the store). The flat fee is assessed in addition to the 1 percent conversion fee.

Suppose a customer wanted to see the conversion rate, before doing a transaction or paying any associated fees, of U.S. dollars to Australian dollars. What is the conversion rate of U.S. dollars to 1 Australian Dollar to the nearest hundredth?

Correct Answer: 0.71

Explanation:

0.71 The fees in this case are extra information that we don't even need because the customer wants to know what the conversion rate is without taking fees into account. We know the conversion rate of 1 U.S. dollar (USD) to Australian dollars (AUD):
1 USD = 1.41 AUD
We want to know how many U.S. dollars a person would get for 1 Australian dollar, so divide both sides by 1.41:
0.709 USD = 1 AUD
When rounded to the nearest hundredth, the answer is 0.71.