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Jimjam is a company based in India, where the currency is the Indian Rupee (IR). They owe money to a
supplier in Ruritania, where the currency is Ruritanian Dollars (R$). The amount owing is R$ 240,000.
The current exchange rate is IR/R$ 8.6380 – 9.2530
How many Indian Rupees will Jimjam have to pay?1)you had multiplied 240000 with 9.2530.? is it bec its direct quote? buying rate becomes 9.2530 ? since its pay we need to buy $ and sell INR . since payment is $ we need to take buy rate .is it???
2)CAN we read it like 1inr = RS $ 8.638 Ie; RS $8.638 / INR which becomes indirect quote or should we read it as direct quote what given in the question?
Firstly, whether we call it a direct or an indirect quote is completely irrelevant for the exam. All that matters is to be able to convert the money correctly.
Normally just use the exchange rate given in the exam (but use it correctly) – there is no point whatsoever in inverting the quote. It will give the same answer (subject to roundings) but simply makes unnecessary extra work.
I do through this example in my free lectures and I do suggest that you watch them.
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