Exchange rate calculators are online tools which you use to convert one currency to another. They usually are available in the form of 'widgets' or programmed graphical user interface (GUI) which mechanically calculates the data that the end user inputs to provide the desired results.
There are two general types of exchange rate calculator that you'd see around - the static exchange rate calculator as well as the universal exchange rate calculator.
The static exchange rate calculator is one which converts any currency to a fixed currency programmed into the widget. You have to input the second currency which you want to convert into the fixed currency, and the rate of exchange between the two. I find this type of exchange rate calculator rather primitive and outdated. People who'd want to use an exchange rate calculator do not generally know the exchange rate that's why they are needing such a tool to help them out determine the conversion value of a particular currency. Besides, anyone who knows the rate of exchange might as well do the calculation himself using a standard calculator.
The universal exchange rates calculator is the more common type of exchange rate calculator that you'd see around. Conversion is actually simple. You chose the two currencies you want to exchange with one another by simply clicking on them at the 2 drop down menus contained in the widget (one menu for the base currency and one menu for the end currency). Then you type in the quantity of the base currency you want converted. Click the convert button and you'd get the converted amount in a flash. You absolutely need not input the rate of exchange on this type of calculators since they link to real time data providers. The exchange rate calculator of this kind therefore converts currencies based on the latest exchange rate data coming from its real time provider.
The other important thing that you should understand is that 'not all exchange rates calculators are created equal'! Yes, that's right, not all exchange rate calculators give precisely the same conversions. It's because they are subscribed to or are connected to different sources of real time data feed. For purposes of providing an exchange rate calculator, the best source to link to would be to a data provider that has links to the interbank market in which banks actually trade with each other using the EBS System (Electronic Brokering System) and the Thomas Reuters Dealing 3000 Xtra System. They are far more reflective of the rates which most banks all over the world use to fix their own exchange rates for the day.
Unfortunately it will be hard for us to know which exchange rates calculator is linked to a data source provider which has the interbank market in its network. So the logical way to use exchange rate calculator is to expect that there will be some conversion differentials and to make some allowances for such.
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