Currency Exchange Calculator Formula

Understand the math behind the currency exchange calculator. Each variable explained with a worked example.

Use the Currency Exchange Calculator

Formulas Used

Converted Amount

converted = (amount - fee_amount) * exchange_rate

Fee Cost

fee_cost = fee_amount

Effective Exchange Rate

effective_rate = (amount - fee_amount) * exchange_rate / amount

Variables

VariableDescriptionDefault
amountAmount to Convert(USD)1000
exchange_rateExchange Rate (per 1 USD)0.92
fee_pctExchange Fee(%)2.5
fee_amountDerived value= amount * fee_pct / 100calculated

How It Works

How Currency Exchange Works

Multiply your amount by the exchange rate to convert. Exchange providers charge a fee (percentage or markup on the rate).

Formula

Converted = (Amount - Fee) x Exchange Rate

Effective Rate = Converted / Original Amount

Worked Example

Convert $1,000 USD to EUR at 0.92 rate with 2.5% fee.

amount = 1000exchange_rate = 0.92fee_pct = 2.5
  1. 01Fee = $1,000 x 2.5% = $25.00
  2. 02Net amount = $1,000 - $25 = $975
  3. 03Converted = $975 x 0.92 = 897.00 EUR
  4. 04Effective rate = 897.00 / 1,000 = 0.8970

Ready to run the numbers?

Open Currency Exchange Calculator