The British Pound, US Dollar, European Euro, Japanese Yen; they are all examples of currency, the official money of a country.
Every country has their own, some even share the same type or name. However, not every currency has the same value.
The currency you are probably most familiar with is the British Pound Sterling, which is represented using the symbols ÂŁ (pounds) and p (pence), with 100p equal to ÂŁ1.00. Today's coins are 1 penny, 2 pence, 5 pence, 10 pence, 20 pence, 50 pence, ÂŁ1 and ÂŁ2. The notes are ÂŁ5, ÂŁ10, ÂŁ20 and ÂŁ50.
You can keep this money yourself and pay using the coins and notes, or transfer the money from your bank account to the shop by using a debit card or cheque.
Depending on the cost, you could also choose to spread the amount you pay over a longer period of time by using a credit card or money from a loan.
Paying for things
We can use a combination of coins and notes every day to pay for goods and services of any value. For example, if you purchase a new computer game from a shop in Belfast for ÂŁ65.50, you could pay the exact amount using a ÂŁ50, ÂŁ10 and ÂŁ5 note, with a 50p coin. You could also choose to pay with a total greater than the actual price, such as ÂŁ70 (ÂŁ50 and ÂŁ20 notes). Luckily, you will receive change (money returned after paying for something with more money than it costs).
Question:
Can you calculate how much change you will receive in this case and what the least amount of coins or notes could be given back to you?
Answer
That’s right, £4.50, which can be made using two £2 coins and a 50p.
Different currencies
If you were to travel to a different country, the exact same game that you bought in Belfast for £65.50 would cost a different amount in a new currency. For example, to buy the game in Spain might cost 77 Euros or €77.00. In America, it would cost 91 Dollars or $91.00. This is because when you go abroad you need to change your money to the currency of the country you visit, in this case from British Pound Sterling to European Euros or US Dollars. This is known as the foreign exchange rate, which compares the worth of one countries currency to another.
No matter where you live in the world, money plays a key role in our lives. The important thing to learn is how to use it wisely.
Image caption, The Euro is used in 19 different countries across the EU
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