Exam 8: Simple Interest Applications

You bought a $100,000 364-day T-bill. The T-bill was discounted at a rate of 5%. If you paid $99,900.00 for the T-bill, how many days before maturity did you buy it?

Tracey bought a 182-day Government of Canada treasury bill at the price to yield an annual rate of return of 4.68%. a) What was the price paid by Tracey if the T-bill has a face value of $100 000? b) Later the same day, Tracey sold this T-bill to a large corporation to yield 4.48%. What was Tracey's profit on this transaction?

Find the maturity value of a $473 note issued on October 4 at 8.5% for 190 days.

Calculate the legal due date of a $600.00, 120 day note with interest at 5% dated March 2, 2014.

An investment dealer bought a 182-day Government of Canada treasury bill at the price required to yield an annual rate of return of 3.38% a) What was the price paid by the investment dealer if the T-bill has a face value of $1 000 000? b) Later the same day, the investment dealer sold this T-bill to a large corporation to yield 3.25%. What was the investment dealer's profit on this transaction?

Find the present value of a seven-month note for $3 940 dated April 1 with interest at 7.45% if money is worth 6%, on August 15?

The maturity value of a 155-day 7.5% note dated March 14 is $1 721.74. Compute the face value of the note.

Find the present value of a non-interest-bearing seven-month promissory note for $1 800 dated August 27, 2012, on December 4, 2012, if money is then worth 8.375%.

You borrow $4000 on August 2nd this year. Your demand loan carries an interest rate of 8.41%. You make partial payments of $500 on September 15th and $1575 on October 17th. You want to make a final payment to pay off the remaining outstanding balance on November 21st. What is the size of your final payment? Use the declining balance method.

Dirk Propp borrowed $14 300.00 for investment purposes on May 19 on a demand note providing for a variable rate of interest and payment of any accrued interest on December 31. He paid $1300.00 on June 28, $1450 on September 25, and $4200.00 on November 15. How much is the final payment on December 31 if the rate of interest was 11.5% on May 19, 8.21% effective August 1, and 6.35% effective November 1? Use the declining balance method.

A promissory note has a face value of $6 000 and it has a date of issue of June1 this year. The term is for 6 months. The rate of interest is 8.00%. What is the maturity value of the note?

You borrowed $4600 at 9.1% per annum calculated on the unpaid monthly balance and agree to repay the principal together with interest in monthly payments of $1050 each. Construct a complete repayment schedule.

Sean borrowed $3 000.00 from Sepaba Savings and Loan. The line of credit agreement provided for repayment of the loan in three equal monthly payments plus interest at 6.00% per annum calculated on the unpaid balance. Determine the total interest cost.

A 7-month note dated May 1, 2014 is made at 3.75% for $3 705. What is the present value of the note on September 4, 2014, if money is worth 6.87%?

Find the maturity date and the maturity value of a $1 415.00, 5.25%, 220-day note dated February 25, 2012.

A $2850, five-month promissory note with interest at 6.15% is issued on June 1. Compute the proceeds of the note on August 13, when money is worth 7.5%.

Find the proceeds of a six-month note for $966 dated September 16, 2012, with interest at 5.45% if money is worth 5.75% on November 4, 2012.

What is the face value of a three-month promissory note dated July 30, 2013, with interest at 6.5 percent if its maturity value is $1742.84?

Use the design shown in Figure 8.1 to construct a complete repayment schedule including the totaling of the Amount Paid, Interest Paid, and Principal Repaid columns for the following loan. On April 22, Tim borrowed $2900.00 from Keewatin Credit Union at 6.5% per annum calculated on the daily balance. He gave the Credit Union four cheques for $535.00 dated the 15th of each of the next four months starting May 15 and a cheque dated October 15 for the remaining balance to cover payment of interest and repayment of principal. -You borrowed the amount indicated in the Balance after payment column of the following schedule from your friendly credit union. You agreed to repay the loan in monthly payments equal to of the original loan, including interest due and principal. Interest is charged at a rate of 12.2% per annum computed on the monthly balance. Repayment Schedule Required: Complete the repayment schedule (this includes totaling of the Payment, Interest paid and Principal repaid columns to check the accuracy of your work). a) What is the loan balance after the third payment? b) What is the total amount needed to repay the loan?

Compute the present value of a 150-day non-interest-bearing promissory note for $5 000 dated June 15, if the note was sold on August 21 and money is worth 6.5%.