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In Business / College | 2025-07-08

If the exchange rate is $1 USD =15 ZAR, calculate how much 500 USD is in ZAR. If the exchange rate changes to 1 USD $=16$ ZAR, how does this impact the value of 500 USD?

Asked by koketsoratshio03

Answer (1)

Initially, 500 U S D is 500 × 15 = 7500 Z A R .
After the exchange rate changes, 500 U S D becomes 500 × 16 = 8000 Z A R .
The value of 500 U S D increases by 8000 − 7500 = 500 Z A R .
Therefore, the value of 500 U S D increased by 500 Z A R ​ .

Explanation

Problem Analysis We are given an initial exchange rate of 1 U S D = 15 Z A R and asked to calculate how much 500 U S D is in ZAR. Then, the exchange rate changes to 1 U S D = 16 Z A R , and we need to determine the impact of this change on the value of 500 U S D .

Calculating Initial ZAR Value First, we calculate the equivalent of 500 U S D in ZAR at the initial exchange rate. To do this, we multiply the amount in USD by the exchange rate: 500 U S D × 15 Z A R / U S D = 7500 Z A R

Calculating New ZAR Value Next, we calculate the equivalent of 500 U S D in ZAR at the new exchange rate. Again, we multiply the amount in USD by the exchange rate: 500 U S D × 16 Z A R / U S D = 8000 Z A R

Comparing the Values Now, we compare the two ZAR values to determine the impact of the exchange rate change. We subtract the initial ZAR value from the new ZAR value: 8000 Z A R − 7500 Z A R = 500 Z A R

Determining the Impact Since the new ZAR value ( 8000 Z A R ) is greater than the initial ZAR value ( 7500 Z A R ), the value of 500 U S D has increased by 500 Z A R due to the change in the exchange rate.

Final Answer Therefore, initially, 500 U S D is equal to 7500 Z A R . After the exchange rate changes, 500 U S D is equal to 8000 Z A R . The value of 500 U S D increased by 500 Z A R .


Examples
Exchange rates play a crucial role in international trade and travel. For instance, if a company in the US wants to import goods from South Africa, a favorable exchange rate (where the USD is strong relative to the ZAR) means the US company can buy more goods for the same amount of dollars. Similarly, if you're traveling from the US to South Africa, a better exchange rate means your dollars will go further, allowing you to spend more on accommodation, food, and activities. Understanding exchange rates helps businesses and individuals make informed decisions about international transactions and travel budgets.

Answered by GinnyAnswer | 2025-07-08

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