Money Exchange (Solution)

Solution:
There is actually no conclusive result as to who is correct. This is because it depends on the daily exchange rates of these countries, which depends on the economies of these countries each day. The exchange rates between countries depend on their economies when compared to each other. However, if the amount that we are changing is very little, the difference is actually insignificant. But, when the amount that we are changing is a lot, then the difference becomes significant.

Note : The exchange rates that are used is obtained on the day that I attempted the question.

Singapore Dollars \( \to \) US Dollars:

Singapore Dollars	US Dollars
S$ 1	US$ 0.7934

Singapore Dollars \( \to \) British Pounds \( \to \) US Dollars:

Singapore Dollars	Bitish Pounds
S$ 1	£ 0.5108

British Pounds	US Dollars
£ 1	US$ 1.5550
£ 0.5108	US$ 0.7943

Singapore Dollars \( \to \) Euros \( \to \) US Dollars:

Singapore Dollars	Euros
S$ 1	€ 0.5981

Euros	US Dollars
€ 1	US$ 1.3286
€ 0.5981	US$ 0.7946

Singapore Dollars \( \to \) Japanese Yen \( \to \) US Dollars:

Singapore Dollars	Japanese Yen
S$ 1	¥ 77.33

Japanese Yen	US Dollars
¥ 1	US$ 0.010275
¥ 77.33	US$ 0.7946

Singapore Dollars \( \to \) Malaysian Ringgits \( \to \) US Dollars:

Singapore Dollars	Malaysian Ringgits
S$ 1	RM 2.5030

Malaysian Ringgits	US Dollars
RM 1	US$ 0.3175
RM 2.5030	US$ 0.7947

• For small amount of Singapore Dollars (\(<\) S$ 1000), we will actually get approximately the same amount of US Dollars regardless of which method we use. The difference is actually insignificant (\(<\) US$ 1). Hence, Friend Z is correct.
• For large amount of Singapore Dollars (\(>\) S$ 1000), we can get more US Dollars when we change Singapore Dollars to currencies like British Pounds, Euros, Japanese Yen and Malaysian Ringgits (as shown in the tables above) before changing to US Dollars. The difference can be quite significant (\(>\) US$ 1). Hence, Friend X is correct.

Note: Friend Y may be correct if we change the currency that we are changing from and the currency that we are changing to or when the money changing is done on a different day (i.e. using different exchange rates).