Question 1

The amount of money borrowed is called:

Accepted Answer

A)  discount amount 
B)  proceeds 
C)  principal 
D)  maturity value 
A)  discount amount 
B)  proceeds 
C)  principal 
D)  maturity value C

Question 2

The length of time for which money is borrowed is called the term of a promissory note.

Accepted Answer

A) True 
 B)False  True

Question 3

A loan is made on August 15 and has a due date of April 30 during a non-leap year. Find the exact time of the loan.

Accepted Answer

A)  257 days 
B)  258 days 
C)  158 days 
D)  289 days 
A)  257 days 
B)  258 days 
C)  158 days 
D)  289 days B

Question 4

Time is considered ordinary when each month is assumed to have 30 days.

Accepted Answer

A) True 
 B)False

Question 5

The total amount of money due at the end of a loan period is referred to as the:

Accepted Answer

A)  compound interest 
B)  simple interest 
C)  principal 
D)  maturity value 
A)  compound interest 
B)  simple interest 
C)  principal 
D)  maturity value

Question 6

Find the exact time of a loan made on July 6 and due on January 26.

Accepted Answer

A)  202 days 
B)  185 days 
C)  197 days 
D)  204 days 
A)  202 days 
B)  185 days 
C)  197 days 
D)  204 days

Question 7

Exact interest using exact time requires the following formula:

Accepted Answer

A)  exact days divided by 365 
B)  30 divided by 365 
C)  exact days divided by 360 
D)  30 divided by 360 
A)  exact days divided by 365 
B)  30 divided by 365 
C)  exact days divided by 360 
D)  30 divided by 360

Question 8

Find the interest paid on a loan of $69,750 at 9% annual simple interest for 2.7 years.

Accepted Answer

A)  $8920.66 
B)  $23,226.75 
C)  $16,321.50 
D)  $16,949.25 
A)  $8920.66 
B)  $23,226.75 
C)  $16,321.50 
D)  $16,949.25

Question 9

Find the interest paid on a loan of $2000 for 1 year at a simple interest rate of 7% per year.

Accepted Answer

A)  $14.00 
B)  $2140.00 
C)  $160.00 
D)  $140.00 
A)  $14.00 
B)  $2140.00 
C)  $160.00 
D)  $140.00

Question 10

Find the adjusted balance due at maturity for a 180 day note of $38,400 at 11.8% ordinary interest if a partial payment of $20,000 is made on the 100th day of the loan.

Accepted Answer

A)  $19,658.67 
B)  $1258.67 
C)  $20,174.16 
D)  $515.49 
A)  $19,658.67 
B)  $1258.67 
C)  $20,174.16 
D)  $515.49

Question 11

If a business receives a promissory note as payment for the sale of goods and in turn sells the note to a bank, it is called discounting a note.

Accepted Answer

A) True 
 B)False

Question 12

The method used to calculate interest that is sometimes known as the Banker's Rule is:

Accepted Answer

A)  ordinary interest using exact time 
B)  exact interest using exact time 
C)  ordinary interest using ordinary time 
D)  exact interest using ordinary time 
A)  ordinary interest using exact time 
B)  exact interest using exact time 
C)  ordinary interest using ordinary time 
D)  exact interest using ordinary time

Question 13

Find the exact time of a loan made on April 7 and due on February 9.

Accepted Answer

A)  309 days 
B)  260 days 
C)  307 days 
D)  308 days 
A)  309 days 
B)  260 days 
C)  307 days 
D)  308 days

Question 14

When calculating ordinary interest, the denominator of the time fraction will be:

Accepted Answer

A)  exact days per month 
B)  365 
C)  30 days per month 
D)  360 
A)  exact days per month 
B)  365 
C)  30 days per month 
D)  360

Question 15

Simple interest applies when a loan is repaid:

Accepted Answer

A)  for a credit card debt 
B)  as an installment 
C)  after more than one interest period 
D)  in a lump sum 
A)  for a credit card debt 
B)  as an installment 
C)  after more than one interest period 
D)  in a lump sum

Question 16

Rate is the number of days, months, or years that money is borrowed.

Accepted Answer

A) True 
 B)False

Question 17

A loan is dated June 9 and is due November 22.Using exact time, the total number of days is:

Accepted Answer

A)  165 
B)  166 
C)  167 
D)  164 
A)  165 
B)  166 
C)  167 
D)  164

Question 18

How much interest will have to be paid on a loan of $10,138 for 7 months at a simple interest rate of 13.3% per year?

Accepted Answer

A)  $786.54 
B)  $793.15 
C)  $674.18 
D)  $898.90 
A)  $786.54 
B)  $793.15 
C)  $674.18 
D)  $898.90

Question 19

The term "ordinary interest" means a loan is for less than one year.

Accepted Answer

A) True 
 B)False

Question 20

If you borrow money from a bank and sign a promissory note, the bank is considered to be the payee.

Accepted Answer

A) True 
 B)False

The amount of money borrowed is called:

The length of time for which money is borrowed is called the term of a promissory note.

A loan is made on August 15 and has a due date of April 30 during a non-leap year. Find the exact time of the loan.

Time is considered ordinary when each month is assumed to have 30 days.

The total amount of money due at the end of a loan period is referred to as the:

Find the exact time of a loan made on July 6 and due on January 26.

Exact interest using exact time requires the following formula:

Find the interest paid on a loan of $69,750 at 9% annual simple interest for 2.7 years.

Find the interest paid on a loan of $2000 for 1 year at a simple interest rate of 7% per year.

Find the adjusted balance due at maturity for a 180 day note of $38,400 at 11.8% ordinary interest if a partial payment of $20,000 is made on the 100th day of the loan.

If a business receives a promissory note as payment for the sale of goods and in turn sells the note to a bank, it is called discounting a note.

The method used to calculate interest that is sometimes known as the Banker's Rule is:

Find the exact time of a loan made on April 7 and due on February 9.

When calculating ordinary interest, the denominator of the time fraction will be:

Simple interest applies when a loan is repaid:

Rate is the number of days, months, or years that money is borrowed.

A loan is dated June 9 and is due November 22.Using exact time, the total number of days is:

How much interest will have to be paid on a loan of $10,138 for 7 months at a simple interest rate of 13.3% per year?

The term "ordinary interest" means a loan is for less than one year.

If you borrow money from a bank and sign a promissory note, the bank is considered to be the payee.

Review of Whole Numbers and Integers

Review of Fractions

Decimals

Banking

Equations

Percents

Business Statistics

Trade and Cash Discounts

Markup and Markdown

Payroll

Consumer Credit

Filters

Exam 11: Simple Interest and Simple Discount

The amount of money borrowed is called:

The length of time for which money is borrowed is called the term of a promissory note.

A loan is made on August 15 and has a due date of April 30 during a non-leap year. Find the exact time of the loan.

Time is considered ordinary when each month is assumed to have 30 days.

The total amount of money due at the end of a loan period is referred to as the:

Find the exact time of a loan made on July 6 and due on January 26.

Exact interest using exact time requires the following formula:

Find the interest paid on a loan of $69,750 at 9% annual simple interest for 2.7 years.

Find the interest paid on a loan of $2000 for 1 year at a simple interest rate of 7% per year.

Find the adjusted balance due at maturity for a 180 day note of $38,400 at 11.8% ordinary interest if a partial payment of $20,000 is made on the 100th day of the loan.

If a business receives a promissory note as payment for the sale of goods and in turn sells the note to a bank, it is called discounting a note.

The method used to calculate interest that is sometimes known as the Banker's Rule is:

Find the exact time of a loan made on April 7 and due on February 9.

When calculating ordinary interest, the denominator of the time fraction will be:

Simple interest applies when a loan is repaid:

Rate is the number of days, months, or years that money is borrowed.

A loan is dated June 9 and is due November 22.Using exact time, the total number of days is:

How much interest will have to be paid on a loan of $10,138 for 7 months at a simple interest rate of 13.3% per year?

The term "ordinary interest" means a loan is for less than one year.

If you borrow money from a bank and sign a promissory note, the bank is considered to be the payee.

Review of Whole Numbers and Integers

Review of Fractions

Decimals

Banking

Equations

Percents

Business Statistics

Trade and Cash Discounts

Markup and Markdown

Payroll

Consumer Credit

Filters