Exchange rates define how the value of one currency converts into another currency. For example, a single US dollar might be equal to five of another currency. In this case the exchange rate would be 5 when exchanging a US dollar to this currency and .2 would be the rate of exchange from this other currency to a US dollar.

Exchange rates fluctuate continually and how and when the calculation is made can influence the results. For example, today one US dollar might be worth four of another currency, but next week the exchange rate could change and a US dollar might be worth five of the same currency.