Exam 8: Simple Interest Applications

Marty took a $5000 loan from a financial institute at a rate of 6%, which should be repaid in two equal installments made every 4 months. What should be the value of the installment?

A promissory note has a face value of $4500 and it carries an interest rate of 8.73% for a period of 4 months (including the period of grace). It is sold 3 months before the legal due date.What is the present value of the note on the date of sale if money is worth 8.2%?

A promissory note has a face value of $1725 and it has a date of issue of October 1 this year. The term is for 4 months. The rate of interest is 6.13%. What is the legal due date of the promissory note?

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

A 7-month note dated May 1, 2014 is made at 3.75% for $3705. What is the present value of the note on September 4, 2014, if money is worth 6.87%?

You purchase a 182-day treasury bill for $240,000 at a rate of 3.546%. What did you sell it for 111 days before maturity if the new interest rate is 3.778%?

You lend a friend $1300 on May 11th. The demand loan rate is 10.12%. Your friend makes a partial payment on May 26th for $550 and on June 19th for $675. You demand full repayment of the outstanding balance on July 17th. What is the final payment amount to? Use the declining balance method.

Find the maturity value of a 60-day, 4% note for $3000 note dated February 25, 2011.

Average rate of return or yield on a 6-month Government of Canada treasury bills sold on June 18, 2013 was 1.04% (http://www.bankofcanada.ca/rates/interest-rates/t-bill-yields/). At this yield, what price was paid for a T-bill with a face value of $50 000?

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

Meher purchased a $100 000.00, 182-day T-bill on April 4, 2012. a) If the annual rate of return is 4.2%, calculate the purchase price. b) Calculate the selling price of the bill if it is sold on June 20, 2012 to yield 3.19%. c) Calculate the rate of interest realized.

For the following promissory note, determine the amount of interest due at maturity.

An investor purchased $250 000 in 91-day T-bills on the issue date for $248 157.56. After holding the T-bills for 37 days, she sold them for a yield of 3.25%. a) What was the original yield of the T-bills? b) For how much did the investor sell the T-bills? c) What rate of return (per annum) did the investor realize while holding this T-bill?

Linda borrowed $19 000.00 on August 17. She paid $4500.00 on November 11, $5500.00 on December 8, and the balance on February 21. The rate of interest on the loan was 8.5%. How much did Linda pay on February 20? Use the declining balance method.

Excel Electronics is Eastern Alberta accepted a 6-month promissory note from a customer for the $3950 balance owed on the purchase of a refrigerator. The note was dated November 8, 2015 and charged interest at 6.99%. The store's proprietor sold the promissory note 38 days later to Standard Union finance company at a price that would yield Standard Union 19% rate of return on its purchase price. What price did Standard Union pay to the proprietor of Excel Electronics?

A note for $665 dated March 22, 2014, with interest at 7.34% per annum, is issued for 128 days. Determine a) the legal due date; b) the interest period (in days); c) the amount of interest; d) the maturity value.

A government of Ontario 364-day T-bills with a face value of $50 000 were purchased on January 2 for $48 000.76. The T-bills were sold on September 28 for $48 999.99. a) What was the market yield rate on January 2? b) What was the yield rate on September 28? c) What was the rate of return realized?

A six-month promissory note dated November 8, 2013 is made at 6% for $2900.00. What is the present value of the note thirty-eight days later if money is worth 7.2%?

Find the maturity date and the maturity value of a $1415.00, 5.25%, 220-day note dated February 25, 2012.

Syed bought 168 day Government of Canada T-Bills on 30 April 2016, yielding 0.6%. The face value of the bills was $55 000. He immediately sold it to a client at a higher price that presented a yield to the client of 0.54%. What profit did Syed make?