Reverse Exchange Rate Calculator
Determine the actual exchange rate you received after fees and spreads.
What is a Reverse Exchange Rate?
A reverse exchange rate calculation is the process of determining the real value of one currency against another based on the final amounts exchanged. Often, when you use a bank or an exchange bureau, the "advertised" rate isn't what you actually get because of hidden fees, commissions, or a "spread" (the difference between the buy and sell price).
By using the Total Amount Sent and the Total Amount Received, you can strip away the marketing and see exactly how much of your source currency was required to purchase one unit of the target currency.
How to Calculate the Effective Exchange Rate
To find the effective rate manually, you can use the following formulas:
- Direct Rate: Amount Received ÷ Amount Sent (How much target currency you got for every 1 unit of source).
- Reverse Rate: Amount Sent ÷ Amount Received (How much source currency it cost you for every 1 unit of target).
Example Calculation
Suppose you are traveling from the United States to Europe. You spend $1,200 USD at a kiosk and receive €1,050 EUR in cash. While the market rate might show 1.10, your actual experience is different.
Using the Reverse Exchange Rate Calculator:
- Source Amount: 1200
- Target Amount: 1050
- Result: Your effective rate was 1.142 USD per 1 EUR.
Why Use a Reverse Rate Instead of the Market Rate?
Market rates (often called mid-market rates) are what banks use to trade with each other in massive volumes. Consumers rarely get these rates. By calculating the reverse rate, you can compare different money transfer services. If Service A gives you a rate of 1.25 and Service B gives you a rate of 1.22 (where the rate is Source/Target), Service B is actually cheaper because it costs you less source currency to get the same amount of target currency.
Understanding the "Spread"
The spread is essentially a hidden fee. If the mid-market rate is 1.10 and your reverse calculation shows 1.15, that 0.05 difference is the profit kept by the exchange provider. This calculator helps you visualize that gap so you can make better financial decisions for international transfers or travel.