What Is Currency Conversion?
Currency conversion is the process of converting one currency into another. It's what allows you to take your money from one country and use it to buy goods and services in another country with a different currency. The conversion is based on an agreed-upon value known as the exchange rate.
The Core Idea: Exchange Rates
The foundation of every currency conversion is the exchange rate. An exchange rate tells you how much one currency is worth in terms of another.
For example, if the exchange rate between the US Dollar (USD) and the Indian Rupee (INR) is 1 USD = 83 INR, it means that one US dollar can be exchanged for 83 Indian rupees. A currency converter tool uses this rate to do the math for you.
Conversion Amount = (Amount to Convert) × (Exchange Rate)
100 USD × 83 = 8,300 INR
Why is Currency Conversion Important?
International Travel
When you travel to another country, you need to convert your home currency to the local currency to pay for hotels, food, and activities.
Global Trade & E-commerce
Businesses that buy or sell products internationally must convert currencies to pay suppliers and receive payments from customers. Online shoppers also use it to see product prices in their local currency.
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