Mike has 1,000 pesos he will convert to US dollars using a currency exchange service. At this time, the currency exchange rate is 1 peso = 0.05 US dollars. The exchange service will charge Mike a 3% fee on the converted US dollar amount. How many US dollars will Mike receive from the currency exchange after the 3% fee is applied?

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We first convert the pesos to US dollars using standard conversion techniques:

$$ 1{,}000 \text{ pesos} \cdot \frac{0.05 \text{ US dollars}}{1 \text{ peso}} $$ $$ = 1{,}000\cdot 0.05 $$ $$ = 50 \text{ US dollars} $$

We apply a 3% fee, which is equivalent to taking 97% of the current amount.

$$ 50 \cdot (0.97)$$ $$ = \boxed{48.5}$$

If the previous step is unfamiliar to you, I recommend reviewing and mastering Percents.

Technically, there is no need to calculate the percent fee. If $50 is the amount after the conversion, it would only make sense that a nonzero fee will result in an amount lower than 50 US dollars. Only the first option is reasonable.