Exam 13: Simple Interest

A florist borrowed money to buy a large quantity of new imported floral art products to sell in her shop. If it cost her $393.60 to borrow the money for 146 days at 12% exact simple interest (365-day year), what was the amount borrowed?

Andrew Merrill, owns a mobile sandwich and pretzel stand. Andrew borrows $5,200 for 135 days at 9% ordinary simple interest. What total will Andrew need to repay for both interest and principal? (Use a 360-day year.)

Barbara Evanston, a novelty shop owner, can save $500 by purchasing merchandise now instead of waiting for two months. However, she will have to borrow $3,200 for 60 days and will have to pay 8.5% exact simple interest. How much will Barbara have to pay in interest to borrow the money? (Use a 365-day year.)

Shane Morita opened a pet store near a school, hoping that children would see the pets in the window as they walked home. Almost immediately he needed to borrow money to maintain the pets. He got a 90-day loan for $5,600 at 9.3% exact simple interest. Compute the amount of Shane's total obligation in 90 days. (Use a 365-day year.)

Compute the exact interest (365-day year) and the total amount of the loan for the following problems. Round answers to the nearest cent.​ ​

Franklin Woo loaned money to his daughter, LeAnn, to help her purchase a car. The loan was for two years at 3.5% exact simple interest (365-day year). When LeAnn repaid the loan after two years, the interest amounted to $385. Compute the amount that Franklin had originally loaned to her.

Compute (a) the ordinary interest, (b) the exact interest and (c) their difference. Round answers to the nearest cent.​ ​

Edison Automotive Machining Company needs to borrow money to repair a broken milling machine. The company can borrow $80,000 for 300 days at 7% exact simple interest. Compute the total amount that Edison will need to repay. (Use a 365-day year.)

In each problem, (1) compute the actual exact interest (365-day year) and (2) estimate the interest by rounding the principal to the nearest hundred dollars. For each estimate, assume that a year has 360 days and use the given suggestion to create a shortcut.​ ​

David Riley owns a five-year-old computer game business. Because of slack business, David needs to borrow $25,000. Compute the interest fee if David gets the loan for 120 days at 12% ordinary simple interest. (Use a 360-day year.)

Compute the simple interest. If the time is given in months, let one month be 1/12 of a year. Round answers to the nearest cent.​ ​

Compute the ordinary interest (360-day year) and the total amount of the loan in the following problems. Round answers to the nearest cent. ​

In each problem, (1) compute the actual exact interest (365-day year) and (2) estimate the interest by rounding the principal to the nearest hundred dollars. For each estimate, assume that a year has 360 days and use the given suggestion to create a shortcut. Round answers to the nearest cent.​ ​

Nina Lopez calls a finance company to investigate borrowing $2,700 for 60 days. Nina qualifies for a loan at 9.75% exact simple interest (365-day year). If she accepts the loan, compute the total amount that Nina will have to repay.

Deanna and her sister Molly borrowed $1,600 from their mother. Their mother only charged 3% ordinary simple interest and the loan was for two years. Compute the total interest and principal that the sisters need to repay their mother. (Use a 360-day year.)

Jorge Garcia was to lend $5,250 to his cousin at 3% ordinary simple interest for 240 days. If the cousin repays everything as agreed upon, what total will Jorge receive? (Use a 360-day year.)

Cortez Sheet Metal borrowed $12,250 to make its quarterly payroll tax payment to the government. The loan was for 45 days at a 8% exact simple interest rate. Compute the amount of interest that it paid for this loan. (Use a 365-day year.)

The main refrigerator at Parkside Grille Restaurant had a serious malfunction. Laura Casper, the owner/chef, found a very nice used replacement refrigerator, but she needed $4,500 additional cash immediately. She took out a 75-day loan at 7.5% exact simple interest. Compute the total, interest, and principal that Laura must pay for this loan. (Use a 365-day year.)

Compute the exact interest (365-day year) and the total amount of the loan for the following problems. Round answers to the nearest cent.​ ​

Compute the simple interest. If the time is given in months, let one month be 1/12 of a year. Round answers to the nearest cent.​ ​