Question 1

A 182-day T-Bill with a face value of $50,000 is purchased for $X by an investor who wishes to yield r = 2.85%.What is X?

Accepted Answer

A) $49,289.45 
B) $49,299.41 
C) $50,720.42 
D) $50,710.55 
A) $49,289.45 
B) $49,299.41 
C) $50,720.42 
D) $50,710.55

Question 2

Bob purchases a new smart phone for $500.The terms for the purchase are 2/30 n/90.If Bob would need to borrow money to take advantage of the discount,at what simple interest rate r will he be indifferent as to borrowing to take advantage of the discount versus paying the full balance when due? (Assume exact interest).

Accepted Answer

A) 12.41% 
B) 8.28% 
C) 12.24% 
D) 8.11% 
A) 12.41% 
B) 8.28% 
C) 12.24% 
D) 8.11%

Question 3

A bank lends money using a simple discount rate d = 8%.If John needs $10,000 today and will repay the loan in 8 months,what loan amount should he request?

Accepted Answer

A) $10,800.00 
B) $10,533.33 
C) $10,563.38 
D) $9,466.67 
A) $10,800.00 
B) $10,533.33 
C) $10,563.38 
D) $9,466.67

Question 4

What is the price of a $100,000 182-day T-bill if the yield rate is 5%?

Accepted Answer

A) $97,506.85 
B) $97,567.50 
C) $102,493.15 
D) $102,556.90 
A) $97,506.85 
B) $97,567.50 
C) $102,493.15 
D) $102,556.90

Question 5

How long will it takes $4000 to accumulate to $4262.77 at a simple discount rate of 9%?

Accepted Answer

A) 247 days 
B) 250 days 
C) 263 days 
D) 267 days 
A) 247 days 
B) 250 days 
C) 263 days 
D) 267 days

Question 6

A debt of $3000 is due in 4 months and another $5000 is due in 9 months.Instead,it is agreed that a payment of $X,made in 3 months,followed by a payment of $4000 in 10 months,will fully pay off the loan.Using 9 months as the focal date,what is X if the simple interest rate on the loan is r = 10%?

Accepted Answer

A) $4365.96 
B) $3960.06 
C) $3896.83 
D) $3841.01 
A) $4365.96 
B) $3960.06 
C) $3896.83 
D) $3841.01

Question 7

What simple interest rate,r,is Jim being charged on the promissory note?

Accepted Answer

A) 17.23% 
B) 16.73% 
C) 16.50% 
D) 15.97% 
A) 17.23% 
B) 16.73% 
C) 16.50% 
D) 15.97%

Question 8

A payment of $5000 that was due 20 days ago and another payment of $4000 that is due 50 days from now are to be settled/replaced by a payment of $6000 today and a payment of $X 90-days from today.If r = 11%,what is the value of X using today as the focal date?

Accepted Answer

A) $3051.33 
B) $3008.81 
C) $3001.67 
D) $2892.31 
A) $3051.33 
B) $3008.81 
C) $3001.67 
D) $2892.31

Question 9

A loan of $10,000 was taken out at a simple interest rate of 12%.The first two partial payments are: $200 (91 days after the loan date)and $Y (39 days later).Using the declining balance method,the loan balance immediately after the payment of Y is $8228.67.What is the value of Y?

Accepted Answer

A) $2198.73 
B) $2002.56 
C) $2000.00 
D) $1998.73 
A) $2198.73 
B) $2002.56 
C) $2000.00 
D) $1998.73

Question 10

A 182-day T-Bill with a face value of $25,000 is purchased for $X by an investor who wishes to yield r = 3.50%.What is X?

Accepted Answer

A) $24,558.29 
B) $24,564.24 
C) $24,565.33 
D) $24,571.18 
A) $24,558.29 
B) $24,564.24 
C) $24,565.33 
D) $24,571.18

Question 11

A 120-day promissory note for $50,000 bears interest at r = 10%.It is sold 90-days before the maturity date to a bank that discounts the note at r = 15%.What does the bank pay for the note?

Accepted Answer

A) $49,742.71 
B) $49,801.85 
C) $49,782.29 
D) $49,841.48 
A) $49,742.71 
B) $49,801.85 
C) $49,782.29 
D) $49,841.48

Question 12

After 30-days,the note is sold by Brenda to a bank that charges a simple discount rate of d = 10%.What are the proceeds of the sale?

Accepted Answer

A) $5050.33 
B) $5053.05 
C) $5048.83 
D) $5054.41 
A) $5050.33 
B) $5053.05 
C) $5048.83 
D) $5054.41

Question 13

Suppose you deposit $10,000 on March 21 in a fund earning simple interest at r = 13%.How much will you have exactly 6 months later?

Accepted Answer

A) $10,664.44 
B) $10,658.91 
C) $10,655.34 
D) $10,650.00 
A) $10,664.44 
B) $10,658.91 
C) $10,655.34 
D) $10,650.00

Question 14

A person borrows $100,000 at a simple interest rate r = 24%.He is to repay the loan with 2 payments,one at the end of 2 months and the other at the end of 6 months.The first payment is the same as the 2nd payment.Determine the size of the payments,using the end of 6 months as the focal date.

Accepted Answer

A) $46,296.30 
B) $48,076.92 
C) $53,846.15 
D) $53,925.93 
A) $46,296.30 
B) $48,076.92 
C) $53,846.15 
D) $53,925.93

Question 15

You are given that $2000 accumulates to $2032.88 at the end of 120 days at a simple interest rate equal to r.What is the equivalent simple discount rate,d,over the same 120-days period?

Accepted Answer

A) 5.00% 
B) 4.92% 
C) 4.53% 
D) 1.62% 
A) 5.00% 
B) 4.92% 
C) 4.53% 
D) 1.62%

Question 16

You borrow $800 today at r = 12% from a bank that uses ordinary interest (Banker's rule).You pay back at least $845 in n-days.What is the value of n?

Accepted Answer

A) 168 days 
B) 169 days 
C) 171 days 
D) 172 days 
A) 168 days 
B) 169 days 
C) 171 days 
D) 172 days

Question 17

You deposit $10,000 in a 9-month investment that pays r = 8% for the first 6 months and r = 6% for the last 3 months.What is the maturity value of the investment at the end of 9 months?

Accepted Answer

A) $10,544.80 
B) $10,550.00 
C) $10,556.00 
D) $10,563.61 
A) $10,544.80 
B) $10,550.00 
C) $10,556.00 
D) $10,563.61

Question 18

You buy a stove for $1500 on February 20.The store gives you 4 months "interest free",after which you must pay the $1500.However,the store charges an administration fee of $50,to be paid today.What rate of simple interest,r,are you being charged for this "interest free" plan?

Accepted Answer

A) 10.49% 
B) 10.34% 
C) 10.14% 
D) 10.00% 
A) 10.49% 
B) 10.34% 
C) 10.14% 
D) 10.00%

Question 19

A debt of $5000 is due today and another debt of $4000 is due in 70 days.These debts are to be settled/replaced by a payment of $6000 in 20-days and a payment of $X in 110-days (from today).If r = 11%,what is the value of X using the end of 20 days as the focal date?

Accepted Answer

A) $2892.31 
B) $3008.81 
C) $3001.67 
D) $3051.34 
A) $2892.31 
B) $3008.81 
C) $3001.67 
D) $3051.34

Question 20

Bill has a debt of $5000 which was due 30 days ago.He also has another debt of $6000 due 90 days from now.It has been decided that these 2 debts will be settled by a payment of $4000 today and a final payment of X made 70 days from now.If the simple interest rate is r = 9%,what is the value of X if you use a focal date of now?

Accepted Answer

A) $7025.94 
B) $7024.80 
C) $7000.00 
D) $6906.73 
A) $7025.94 
B) $7024.80 
C) $7000.00 
D) $6906.73

A 182-day T-Bill with a face value of $50,000 is purchased for $X by an investor who wishes to yield r = 2.85%.What is X?

A bank lends money using a simple discount rate d = 8%.If John needs $10,000 today and will repay the loan in 8 months,what loan amount should he request?

What is the price of a $100,000 182-day T-bill if the yield rate is 5%?

How long will it takes $4000 to accumulate to $4262.77 at a simple discount rate of 9%?

A debt of $3000 is due in 4 months and another $5000 is due in 9 months.Instead,it is agreed that a payment of $X,made in 3 months,followed by a payment of $4000 in 10 months,will fully pay off the loan.Using 9 months as the focal date,what is X if the simple interest rate on the loan is r = 10%?

What simple interest rate,r,is Jim being charged on the promissory note?

A payment of $5000 that was due 20 days ago and another payment of $4000 that is due 50 days from now are to be settled/replaced by a payment of $6000 today and a payment of $X 90-days from today.If r = 11%,what is the value of X using today as the focal date?

A loan of $10,000 was taken out at a simple interest rate of 12%.The first two partial payments are: $200 (91 days after the loan date)and $Y (39 days later).Using the declining balance method,the loan balance immediately after the payment of Y is $8228.67.What is the value of Y?

A 182-day T-Bill with a face value of $25,000 is purchased for $X by an investor who wishes to yield r = 3.50%.What is X?

A 120-day promissory note for $50,000 bears interest at r = 10%.It is sold 90-days before the maturity date to a bank that discounts the note at r = 15%.What does the bank pay for the note?

After 30-days,the note is sold by Brenda to a bank that charges a simple discount rate of d = 10%.What are the proceeds of the sale?

Suppose you deposit $10,000 on March 21 in a fund earning simple interest at r = 13%.How much will you have exactly 6 months later?

A person borrows $100,000 at a simple interest rate r = 24%.He is to repay the loan with 2 payments,one at the end of 2 months and the other at the end of 6 months.The first payment is the same as the 2^nd payment.Determine the size of the payments,using the end of 6 months as the focal date.

You are given that $2000 accumulates to $2032.88 at the end of 120 days at a simple interest rate equal to r.What is the equivalent simple discount rate,d,over the same 120-days period?

You borrow $800 today at r = 12% from a bank that uses ordinary interest (Banker's rule).You pay back at least $845 in n-days.What is the value of n?

You deposit $10,000 in a 9-month investment that pays r = 8% for the first 6 months and r = 6% for the last 3 months.What is the maturity value of the investment at the end of 9 months?

You buy a stove for $1500 on February 20.The store gives you 4 months "interest free",after which you must pay the $1500.However,the store charges an administration fee of $50,to be paid today.What rate of simple interest,r,are you being charged for this "interest free" plan?

A debt of $5000 is due today and another debt of $4000 is due in 70 days.These debts are to be settled/replaced by a payment of $6000 in 20-days and a payment of $X in 110-days (from today).If r = 11%,what is the value of X using the end of 20 days as the focal date?

Compound Interest

Simple Annuities

General and Other Annuities

Repayment of Debts

Bonds

Business Decisions, Capital Budgeting and Depreciation

Contingent Payments

Filters

Exam 1: Simple Interest and Simple Discount

A 182-day T-Bill with a face value of $50,000 is purchased for $X by an investor who wishes to yield r = 2.85%.What is X?

A bank lends money using a simple discount rate d = 8%.If John needs $10,000 today and will repay the loan in 8 months,what loan amount should he request?

What is the price of a $100,000 182-day T-bill if the yield rate is 5%?

How long will it takes $4000 to accumulate to $4262.77 at a simple discount rate of 9%?

A debt of $3000 is due in 4 months and another $5000 is due in 9 months.Instead,it is agreed that a payment of $X,made in 3 months,followed by a payment of $4000 in 10 months,will fully pay off the loan.Using 9 months as the focal date,what is X if the simple interest rate on the loan is r = 10%?

What simple interest rate,r,is Jim being charged on the promissory note?

A payment of $5000 that was due 20 days ago and another payment of $4000 that is due 50 days from now are to be settled/replaced by a payment of $6000 today and a payment of $X 90-days from today.If r = 11%,what is the value of X using today as the focal date?

A loan of $10,000 was taken out at a simple interest rate of 12%.The first two partial payments are: $200 (91 days after the loan date)and $Y (39 days later).Using the declining balance method,the loan balance immediately after the payment of Y is $8228.67.What is the value of Y?

A 182-day T-Bill with a face value of $25,000 is purchased for $X by an investor who wishes to yield r = 3.50%.What is X?

A 120-day promissory note for $50,000 bears interest at r = 10%.It is sold 90-days before the maturity date to a bank that discounts the note at r = 15%.What does the bank pay for the note?

After 30-days,the note is sold by Brenda to a bank that charges a simple discount rate of d = 10%.What are the proceeds of the sale?

Suppose you deposit $10,000 on March 21 in a fund earning simple interest at r = 13%.How much will you have exactly 6 months later?

A person borrows $100,000 at a simple interest rate r = 24%.He is to repay the loan with 2 payments,one at the end of 2 months and the other at the end of 6 months.The first payment is the same as the 2nd payment.Determine the size of the payments,using the end of 6 months as the focal date.

You are given that $2000 accumulates to $2032.88 at the end of 120 days at a simple interest rate equal to r.What is the equivalent simple discount rate,d,over the same 120-days period?

You borrow $800 today at r = 12% from a bank that uses ordinary interest (Banker's rule).You pay back at least $845 in n-days.What is the value of n?

You deposit $10,000 in a 9-month investment that pays r = 8% for the first 6 months and r = 6% for the last 3 months.What is the maturity value of the investment at the end of 9 months?

You buy a stove for $1500 on February 20.The store gives you 4 months "interest free",after which you must pay the $1500.However,the store charges an administration fee of $50,to be paid today.What rate of simple interest,r,are you being charged for this "interest free" plan?

A debt of $5000 is due today and another debt of $4000 is due in 70 days.These debts are to be settled/replaced by a payment of $6000 in 20-days and a payment of $X in 110-days (from today).If r = 11%,what is the value of X using the end of 20 days as the focal date?

Compound Interest

Simple Annuities

General and Other Annuities

Repayment of Debts

Bonds

Business Decisions, Capital Budgeting and Depreciation

Contingent Payments

Filters

A person borrows $100,000 at a simple interest rate r = 24%.He is to repay the loan with 2 payments,one at the end of 2 months and the other at the end of 6 months.The first payment is the same as the 2^nd payment.Determine the size of the payments,using the end of 6 months as the focal date.