Exam 13: Simple Interest

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.​ ​

Richard Davis, owns a butcher and grilling supply store. Richard borrows $7,500 for 150 days at 8% ordinary simple interest. What total will Richard need to repay for both interest and principal? (Use a 360-day year.)​

Paul Harris borrowed $3,825 for 95 days at 8.5% exact simple interest (365-day year). Compute the total amount that Paul must repay at the end of the loan period.

A bank made a $12,000 short-term loan to a new book store and earned $187.40 interest in only 60 days. Compute the exact simple interest rate (365-day year) that the bank charged. (To nearest 1/10 of a percent.)

Walter Fong borrowed $1,175 at 8% ordinary simple interest for 180 days. Compute the total amount that Walter will have to pay on the due date. (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. ​

Dennis Rogers and Betty Chin opened a new art gallery. To help them get started, they borrowed $18,500 for one and one-half years at 8% ordinary simple interest (360-day year). Compute the total amount that they will repay.

Janice Costa bought some power equipment priced at $1,350. The dealer permitted Janice to pay in 60 days but at a price of $1,389.60. Compute the ordinary simple interest (360-day year) rate that the dealer charged. (To nearest 1/10 of a percent.)

For a few years now, Karen Williamson and her sister have operated an office services company that caters to small businesses in town. Recently, they got an opportunity to buy a used high-speed copy machine for $8,500, which they considered an excellent price. To make the purchase quickly, they agreed to pay $1,000 now and borrow $7,500 from the seller for 60 days at 9.5% exact simple interest. What is the total amount that they will need to repay the seller at the end of the 60 days? (Use a 365-day year.)

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

Paula Frye loaned $10,000 to her son's new business at 5% ordinary simple interest (360-day year). At the end of the loan period, Paula received the $10,000 plus $125 interest. Compute the length of the loan period. (To the nearest day.)

Red Winowski invested money for five years because he was guaranteed that he would earn 12% ordinary simple interest (360-day year) per year. At the end of five years, he received all of his original investment plus an additional $1,500 as the interest that he had earned. How much money had Red invested five years earlier?

Charles Clothing Company needs to borrow money to repair its broken sewing machines. It can borrow $90,000 for 270 days at 8% exact simple interest. Compute the total amount that Charles will need to repay. (Use a 365-day year.)

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

Daniel White borrowed $5,000 for 80 days. At the due date, he paid $70 interest and repaid all of the principal. What was the ordinary simple interest rate (360-day year) that was charged on the loan? (To nearest 1/10 of a percent.)

Kyle Winston borrowed $4,000 for 90 days. At the due date, he paid $75 interest and repaid all of the principal. What was the ordinary simple interest rate (360-day year) that was charged on the loan? (To nearest 1/10 of a percent.)

Wendy Ellison needed to borrow $2,500 to pay her son's school tuition. She borrowed the money from her credit union at 8% ordinary simple interest (360-day year) and, repaid a total of $2,600 at the end of the loan period. Compute the length of the loan period. (To the nearest day.)

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

An investor borrowed $10,000 to buy shares of stock of a chain of retail gift stores. The loan was for 120 days at 9% ordinary simple interest. Compute the interest that the investor will pay on the due date. (Use a 360-day year.)​