Exam 1: Simple Interest and Simple Discount

What is the maturity value of the note if ordinary interest (banker's rule)is used?

What is X,if the declining balance method is used?

A wholesale electrical supply store is offering to its customers terms of 3/30,n/90.What is the highest simple interest rate that A-1 Electric can afford to borrow money in order to take advantage of the discount?

A person owes $4000 ten (10)months from now.It is agreed that she can,instead,pay $X now and another $2000 two years from now to replace the given debts.If simple interest is r = 9%,what is X using 8 months as the focal date?

Mr.A lends $20,000 to Mr.B on May 6,2010.A promissory note is written by Mr.B at a simple interest rate of 9%.The due date of the note is October 6,2010.The maturity value of the note is $20,769.32.Mr.C sells the note to a bank on August 6,2010 for $20,419.16.What rate of return does the bank earn on their investment?

Joanne loans Mark $2500.Mark agrees to repay the loan with simple interest rate r = 7% in 1 year.Joanne then turns around and immediately sells her loan repayment rights to a bank which uses a simple discount rate of d = 7%.Which of the following statements is (are)true? (I)Joanne has an immediate net loss of $12.25. (II)The bank will earn $175 on their investment.

How long does it take for $5000 to become $10,000 at a simple interest rate of r = 18% using ordinary interest (Banker's Rule)?

You invest $2300 on June 10.On November 10,you have earned $72.42 of interest.What rate of simple interest did you earn?

What simple discount rate d is equivalent to a simple interest rate of 8% over a 200-day period?

A loan was taken out on January 1,2010 at a simple interest rate of 8.5%.Interest is to be calculated using ordinary interest (Banker's rule).The amount repaid on December 29,2010 is $13,027.02.What was the original amount of the loan?

A loan of $4000 is due in 9 months with simple interest at 8%.The borrower makes partial payments of $150 in 3 months and $2500 in 6 months.Using the declining balance method,what is the balance due in 9 months?

You deposit $200,000 on April 29,2012 in a fund earning simple interest at r = 7%.Using the banker's rule (ordinary interest),how much do you have on September 29,2012?

Using the Merchant's rule,a debt of $4000 is paid off as follows: $2000 in 50 days and a final payment of $2026.51 in 80 days from today.What simple interest rate,r,was used?

Mr.A lends $20,000 to Mr.B on May 6,2010.A promissory note is written by Mr.B at a simple interest rate of 9%,with a due date of October 6,2010.The maturity value of the note is $20,769.32.The note was sold by Mr.A on June 26,2010 to Mr.C who discounts the note at a simple discount rate of 8%.What price does Mr.A receive for the note?

A merchant receives an invoice for $4000 with terms 4/30,n/100.What is the highest rate of simple interest at which he can afford to borrow in order to take advantage of the discount?

A debt of $5000 is to be paid off by installments of $2000 in 30 days,$2500 in 60 days,and a final payment of $584.15.If simple interest is charged at r = 12% and the Declining Balance Method is used,in how many days should the final payment be made?

A debt of $60,000 is to be paid off by installments of $20,000 in 20 days from today,$1500 in 60 days from today and a final payment of $X in 85 days from today.If simple interest is charged at r = 16% and the declining balance method is used,what is X?

A merchant receives an invoice for a motor boat for $5000 with term 3/30,n/100.In order to take advantage of discount,he wants to borrow the required money.If he can borrow at r = 18%,how much money does he lose (negative)or save (positive)?

A man takes out a discounted loan,with face amount $8235,at a simple discount rate of d = 7.5%.If the amount he pays back in 11 months is $8235,how much interest does the man pay on the loan and when does he pay the interest?

You buy an oven for $1500 on March 20,2013.The store gives you 4 months "interest free",so on July 20,2013 you must pay the $1500.However,the store charges an administration fee of $75,which must be paid up front when you buy the oven (March 20,2013).What rate of simple interest,r,are you being charged for this "interest free" plan?