# What is the math formula for calculating exchange rates for FBAR?



## AmInUK

This goes to show you how bad I am at math...

The IRS says the UK GBP rate for 2016 is "0.8120", so what's the formula I use to convert my UK bank balances, which are in GBP, to USD for my FBAR?

Say my UK bank balance is £15,000, do I:


MULTIPLY 15,000 by 0.8120 to get the correct USD amount,

DIVIDE 15,000 by 0.8120 to get the correct USD amount,

or MULTIPLY 15,000 by 1.8120 to get the correct USD amount?

Sorry for the basic question, just goes to show how lacking my math skills are.


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## Bevdeforges

Best way to handle it is to first consider whether a GBP is worth more or less than a USD.

Usually (or so far, anyhow) a pound is more than a dollar. So, to convert pounds to dollars, when the rate given is less than 1 (as in your example), you DIVIDE the pounds by the rate. That should give you a bigger number in dollars than in pounds. In your example, $18,473 for 15,000 GBP.

If you start with dollars, then you need to multiply by the rate that is less than 1.0 to get pounds. (Because you should get fewer pounds for a fixed number of dollars.)

Now, like many things, Brexit will probably turn everything upside down. But at least it hasn't happened yet.
Cheers,
Bev


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## AmInUK

Thanks as always, Bev!


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## Moulard

The mathematics behind it is…

USD Amount x Exchange Rate = Foreign Amount

Its a formula used to determine the Foreign Amount when you know the US Dollar Amount.

But in this case you know the Foreign Amount and are trying to determine the US Amount
So you need to move the exchange rate to the other side of the equation. You do that by dividing.

USD Amount = Foreign Amount / Exchange Rate


But a word of warning, only because you say your maths is not strong point. 
If you ever decided to use a rate published in the UK, then that exchange rate will be an expression 

British Pounds x Exchange Rate = USD

You are still wanting to determine the USD Amount, you can use the formula as is and multiply by the exchange rate.

Its why the exchange rate for US Dollars to Australian Dollars is 1.30 but Australian Dollars to US Dollars is 0.77


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