Kari is on a trip to Italy. She has made a list of cities she would like to tour while she is there, as well as how much she expects it will cost her (between transportation, admission, souvenirs, and so on) to see each one. The prices are listed in either US dollars ($) or euros (€). Kari has a budget of $585 set aside for sightseeing.
| Item | Cost | Currency |
| ------------------- | ------ | -------- |
| Tour of the Vatican | 68.77 | € |
| Tour of Rome | 95.41 | € |
| Tour of Naples | 71.06 | $ |
| Tour of Venice | 113.38 | $ |
| Tour of Milan | 49.69 | € |
She would also like to tour Genoa as well, which would cost her 660.85. If the conversion rate of US dollars to euros at the time of Kari's visit is 1:0.6859, how will this affect her budget? Round all dollar values to the nearest cent.
a. Kari can see Genoa and have $60.33 left in her budget.
b. Kari can see Genoa and have $41.38 left in her budget.
c. Kari has almost exactly enough left in her budget to see Genoa.
d. Kari cannot afford to see Genoa, because it would put her $84.48 over budget.
Answer (2)
Kari's total expenses for the tours, including Genoa, exceed her budget. With a total cost of $1157.09, she is left $572.09 over budget. Thus, she cannot afford to see Genoa.
;
Convert the costs of tours in euros to US dollars.
Calculate the total cost of tours excluding Genoa: 100.26 + 139.10 + 72.44 + 71.06 + 113.38 = $496.24 .
Calculate the total cost of tours including Genoa: 496.24 + 60.85 = $557.09 .
Calculate the remaining budget: 585 − 557.09 = $27.91 .
Explanation
Converting Euros to Dollars First, we need to convert the costs of the tours given in euros (€) to US dollars (\$). We are given the conversion rate: 1 = €0.6859 . This means that to convert from euros to dollars, we need to divide the cost in euros by the conversion rate.
Calculating Tour Costs in Dollars The cost of the Vatican tour in US dollars is: 0.6859 68.77 ≈ $100.26 The cost of the Rome tour in US dollars is: 0.6859 95.41 ≈ $139.10 The cost of the Milan tour in US dollars is: 0.6859 49.69 ≈ $72.44
Total Cost Without Genoa Now, we calculate the total cost of all the tours excluding Genoa. This includes the tours of the Vatican, Rome, Milan, Naples, and Venice. The costs of the Naples and Venice tours are already given in US dollars.So, the total cost without Genoa is: $100.26 + $139.10 + $72.44 + $71.06 + $113.38 = $496.24
Total Cost With Genoa Next, we calculate the total cost of all the tours including Genoa. The cost of the Genoa tour is given as $60.85.So, the total cost with Genoa is: $496.24 + $60.85 = $557.09
Calculating Remaining Budget Now, we calculate the remaining budget if Kari tours Genoa. Kari's total budget is $585.So, the remaining budget is: $585 − $557.09 = $27.91
Conclusion Since the remaining budget is $27.91, Kari can afford to see Genoa and will have $27.91 left in her budget.
Examples
Budgeting is a crucial skill in personal finance. This problem demonstrates how to manage a budget when dealing with expenses in different currencies. Understanding currency conversion and tracking expenses helps in making informed decisions about what you can afford, ensuring you stay within your financial limits. This is particularly useful when traveling or dealing with international transactions, where exchange rates can significantly impact your spending power. By carefully planning and converting costs, you can maximize your budget and avoid overspending.
