Hudson needs to receive 320 AUD (Australian dollars) after the fee is applied, so he is planning to exchange his euros (EUR) for Australian dollars. The current exchange rate is 1 EUR = 1.60 AUD, and the currency exchange service charges a 1% transaction fee. How many euros does Hudson need to exchange to receive 320 AUD after the fee is applied?

Because the 1% fee is deducted from the Australian dollars received, Hudson must first exchange enough euros to produce more than 320 AUD. Let the amount before the fee be x: 0.99x = 320, so x = 320 ÷ 0.99 ≈ 323.23 AUD. At 1.60 AUD per euro, he needs 323.23 ÷ 1.60 ≈ 202.02 EUR, which rounds to 202 EUR, choice C.

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