Exam 6: Simple Interest

A loan of $1,580 bearing interest at 15% is due nine months from now. What single payment three months before the loan is due will put the lender in the same financial position as the scheduled payment at maturity? Assume that money can earn 12%.

Calculate the missing value:

Marika deposited $2,100 on May 22. On September 10, she had $2,120.12. What simple interest rate per year did she earn?

What was the simple interest rate if an investment of $35,000 earned interest of $250 between April 4 and May 23?

How much money would have to be invested from December 22 until June 4 at 12% in order to earn $750 in interest?

At what rate can money be invested if $2370.00 is equivalent to $2508.79 paid 190 days later?

How much money would I have to invest at 6 ½% to earn interest of $4,500 per month?

A $7760 investment earning 6.25% matured at $8083.33. What was the term (in months) of the investment?

On December 19 Jerry's $800 deposit matured at $848.22. It had been earning 8%. What was the date that he made the deposit?

Village Finance Co. advanced three loans to Kamiko-$2,200 on June 23, $1,800 on August 5, and $1,300 on October 31. Simple interest at 7.25% was charged on all three loans, and all were repaid on December 31 when some bonds that she owned matured. What total amount was required to pay off the loans?

Calculate the missing value:

Mr. and Mrs. Chan have listed for sale a residential building lot they own in a nearby town. They are considering two offers. The offer from the Smiths is for $145,000 consisting of $45,000 down and the balance to be paid in six months. The offer from the Kims is for $149,000 consisting of $29,000 down and $120,000 payable in one year. The Chans can earn an interest rate of 4.5% on low-risk short-term investments. a) What is the current economic value to the Chans of each offer? b) Other things being equal, which offer should the Chans accept? How much more is the better offer worth (in terms of current economic value)?

What amount would have to be invested at a simple interest rate of 2.85% to grow to $2,529.28 in 150 days?

How many days will it take $2,500 to grow to $2,614.47 at an annual rate of 8.75%?

How do you determine the economic value on a particular date of a series of payments?

How much money would have to be invested from November 22 until June 29 of the following year at 19%, in order to earn $950 in interest?

John borrowed $1500 at 9.5% on October 10, 2004. On what date did the amount owed first exceed $1565?

Calculate the missing value:

On what date was a $1000 loan granted if the interest accrued as of November 16, 2013 was $50.05? The interest rate on the loan was 7.25%.

If the interest rate money can earn is revised upward, will a scheduled payment's present value be higher or lower? Explain.