Paul travelled from the US to France when the exchange rate was €0.78 = $1.
He saw a mobile phone in a shop in Paris for €187.
The same mobile phone cost $254 in New York.
Where should Paul buy the mobile phone?
Show your working and check your answer.
To compare the cost of the mobile phone in both countries, we need to convert the price in Paris from euros to dollars using the exchange rate given:
€187 x $1/€0.78 = $239.74
So the mobile phone costs $239.74 in Paris and $254 in New York.
Since the phone is cheaper in Paris, Paul should buy it there.
To check our answer, we can also calculate the exchange rate that would make the prices equal:
$254 / €187 = $1.36/€1
If the exchange rate were $1.36/€1, then the price in Paris would be:
$1.36/€1 x €187 = $254.32
Since $254.32 is more expensive than the price in New York, our original answer is correct- Paul should buy the phone in Paris.
To determine where Paul should buy the mobile phone, we need to compare the prices in Paris and New York.
In Paris, the price of the mobile phone is €187.
In New York, the price of the mobile phone is $254.
To compare the prices directly, we need to convert the currencies.
Since the exchange rate is €0.78 = $1, we can convert the price in Paris to dollars by multiplying €187 by the exchange rate:
€187 * $1/€0.78 = $239.74
Now we can compare the converted price in Paris ($239.74) to the price in New York ($254).
Since $239.74 is less than $254, Paul should buy the mobile phone in Paris.
To check our answer, we can convert the price in Paris back to euros using the exchange rate:
$239.74 * €0.78/$1 = €187
Our answer checks out because the converted price in euros matches the original price in Paris.
Therefore, Paul should buy the mobile phone in Paris.