Exam 10: Interest

What is the compound interest earned on Josef's principal of $2,750 at 8% interest compounded quarterly for 2 years? Round to the nearest cent after each calculation.

What is the maturity value of a 6-month loan for $2,500 at 13% ordinary simple interest?

What is the compound interest earned at the end of a 3-year period on a loan with an original principal of $4,500 at 6.75% compounded annually?

The face value on a loan is $8,000, the interest is 10%, and the time is 5 months based on a 360-day year. The bank discounted the note at 12% two months before the maturity of the loan. What is the bank discount?

Kelly borrowed $3,000 with an interest rate of 7.2%. The time is based on 90 days in a 360-day year and the loan was taken out on August 19. The note has been discounted 14% on October 10. What are the proceeds?

Rikki deposited $5,000 into an account with an interest rate of 6% for 7 years. If the interest is compounded quarterly, how many compounding periods are there?

The face value of a note is $7,500 with an interest rate of 12%. The time is based on 90 days in a 360-day year. The note has been discounted at 15% two months before the maturity of the note. How much is the discount and the proceeds?

Use the compound interest table to calculate the maturity value on Jackson s principal of $7,250 at 12% compounded annually for five years.

What is the compound interest at the end of a 2-year period on a loan with an original principal of $5,000 at 10% compounded semiannually? Round to the nearest cent after each calculation.

What is the maturity value on a 120-day loan for $850 at 15% ordinary simple interest?

Malcolm anticipates his college tuition and books to be $50,000 in 3 years. His family recommends an investment that pays 8% interest compounded quarterly. Use the present value table to calculate how much Malcolm should invest today.

The date of a note is February 2, and interest is due on August 1. How many days is it from the initial date of the note to the day the interest is due? Assume a nonleap year.

A friend needs to take out a loan to start a business. The friend asks you to help compare loans to determine which is the best deal. Explain how you could set up a spreadsheet to compare simple, ordinary, and exact interest. Include column headings, information required, and formulas needed.

The face value of a note is $5,290 with an interest rate of 8%. The time is based on 60 days in a 360-day year, and the loan was taken out on March 17. The note has been discounted 16% on April 3. What are the proceeds?

Using the present value table, calculate how much should be invested today to have $11,200 in 6 years at 8% interest compounded quarterly.

The face value on a loan is $18,500, the interest is 9.25%, and the time is 18 months. The bank discounted the note at 15% three months before the maturity of the loan. What is the bank discount?

In Excel, a formula can be used to add a number to a date to calculate the maturity date of a loan.

Mr. and Mrs. Jacobson borrowed $5,000 at an ordinary simple interest rate of 11% for 180 days. If they took the loan out on October 16, what is the due date? Assume a nonleap year.

Andy invests his savings into an account that compounds interest quarterly. To find the number of compounding periods, multiply the number of years of the investment times _______.

The date of a promissory note is entered in Cell A2 as a date; 4/10/2010, and the number of days before discount is entered in Cell A3 as a number, 35. What must be done in Excel to calculate the discount date?