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In this video tutorial, the process of converting currency based on the exchange rate is explained using an example where John wants to convert 15,000 US dollars to Euros. The exchange rate provided is 1 US dollar to 0.9 Euros. To carry out the conversion, the method involves using a fraction where the given amount (15,000 US dollars) is placed in the numerator. In the next fraction, the exchange rate is arranged so that US dollars will cancel out, leaving Euros. The tutorial emphasizes correctly positioning the exchange factors to ensure that units properly cancel during the calculation, guiding viewers through the steps to achieve the final amount in Euros.