Exam 8: Simple Interest Applications

The maturity value of a five-month promissory note issued May 31,2013,is $2134.00.What is the present value of the note on the date of issue if money is worth 6.3%?

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?

Sean borrowed $3000.00 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.

What is the price of a 91-day,$50 000 Government of Canada treasury bill that yields 1.97% per annum?

Caprice buys a painting on his credit card for $14 990.She pays her credit card in full 3 days after the grace period of 11 days using her secured line of credit,which charges her prime (3%)plus 1%.She repays her loan in 168 days.If her credit card company charges her a rate of 28% after the grace period,what is the total amount of interest paid on the purchase of the painting?

Sean purchased a 182-day,$10 000 T-bill on its issue date for $9754.25.What was the original yield of the T-bill?

Government of Manitoba 364-day T-bills with a face value of $2 000 000 were purchased on April 17 for $1 945 970.The T-bills were sold on May 25 for $1 946 340. a)What was the market yield rate on April 17? b)What was the yield rate on May 25? c)What was the rate of return realized?

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.

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.

A promissory note has a face value of $5175.00 and it has a date of issue of April 2 this year.The term is for 5 months.The rate of interest is 6.75%.What is the maturity value of the note?

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.

Determine the missing information for the following line of credit. Harold has a line of credit secured by the equity in his home.The limit on his line of credit is $85 000.Transactions for the period May 1 to September 30 are shown below.Harold owed $45 967.06 on his line of credit on May 1. ----------------------------------------------------------------- Note: "-" indicates a negative balance. Overdraft interest is 28.8% p.a.The line of credit interest is variable.It was 6.15% on May 1,6.50% effective June 20,and 6.55% effective September 10. a)Calculate the interest payments on May 31,June 30,July 31,August 31,and September 30. b)What is the account balance on September 30?

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%?

Find the present value on June 1,2014 of a non-interest-bearing note for $950 issued February 2,2014,for 210 days if money is worth 8.31%.

Leonard buys a painting on his credit card for $14 990.He pays his credit card in full within the grace period of 11 days using his secured line of credit,which charges him prime (3%)plus 1%.He repays his loan in 168 days.If his credit card company charges him a rate of 28% after the grace period,what is the total amount of interest paid on the purchase of the painting?

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?

Darren purchased $250 000 in 364-day T-bills 315 days before maturity to yield 2.86%.After holding it for 120 days,Darren sold the T-bill for a yield of 3.25%. a)How much did Darren pay for the T-bills? b)For how much did Darren sell the T-bills? c)What rate of return (per annum)did Darren realize on the investment?

A 4-month,7.26% percent promissory note dated June 10,2013 has a maturity value of $6231.34.What is the face value of the note?

Determine the present value on January 17,2014 of a non-interest-bearing promissory six-month note for $17 000.00 dated October 15,2013 if money is worth 4.15%.

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%?