Exam 6: Simple Interest

Avril owes Value Furniture $1,600, which is scheduled to be paid on August 15. Avril has surplus funds on June 15 and will settle the debt early if Value Furniture will make an adjustment reflecting the current short-term interest rate of 3.25%. What amount should be acceptable to both parties?

What simple interest rate was used if Eddie charged Meatball $700 interest on a loan of $5,000 for 26 days?

Sam borrowed $1,250 on March 15 at an interest rate of 4.5%. Sam repaid the full amount plus the interest owed on September 1. How much did Sam repay?

A department store is offering a washer/dryer for $1480 now or can pay $1500 in 120 days. If interest is 8.52%, determine whether a customer should purchase now or in 120 days.

A $3,000 obligation due eight months from now is settled by two equal payments, one five months from now and the other nine months from now. If money can earn interest at 16%, what is the size of each payment? Use a focal date five months from now.

A large retail store offers a payment plan of no interest with 50% down and the balance in six months on a minimum purchase of $500. If money can earn 3.25%, how much of a discount should a buyer receive on a purchase of $2,000 if paid in full at the time of purchase?

Calculate the missing value:

Larissa earned $8.74 interest on $1,100 invested from January 11 to June 4. What annual rate of simple interest did she earn?

A loan of $10,000 is to be repaid by three payments of $2,500 due in two, four, and six months, and a fourth payment due in eight months. What should be the size of the fourth payment if an interest rate of 11% is charged on the loan? Use today as the focal date.

Calculate the combined equivalent value in five months from now of a payment stream consisting of $1000 payable today and $1500 payable in five months? Assume money can earn 5.5%.

Morton purchased a 165-day Guaranteed Investment Certificate on October 11. On what date will it mature?

How much money would have to be invested from December 22 until June 4 at 12% in order to earn $750 in interest?

Patrick is scheduled to receive $1480 in 60 days from now. How much should he accept today as an equivalent payment if his money can earn 6.75%?

$8,000 due now is to be replaced by three equal payments in 2, 6 and 9 months from today. If interest is 6.75% annually, determine the value of the payments.

A $9,000 loan is to be repaid in three equal payments occurring 60, 180, and 300 days, respectively, after the date of the loan. Calculate the size of these payments if the interest rate on the loan is 7.25%. Use the loan date as the focal date.

Calculate the amount of interest that would be earned on an account of $47,500 if it earned 6.4% for 293 days.

Calculate the missing value:

How many days will it take $2,500 to grow to $2,614.47 at an annual rate of 8.75%?

The original $3,000 loan was advanced on March 1. The loan is to be repaid by the three indicated payments. Calculate the unknown payment in each case. Use the loan date as the focal date.

How long would it take for a $45,000 investment to earn $6,000 interest at 17.5%?