Question 1

Two payments of $8,000 in 60 days and $5,000 in 90 days are to be replaced by a payment now and another payment of $2,500 in 30 days. If interest is 7.3% annually, determine the value of the payment now.

Accepted Answer

A)  $10,658.12 
B)  $10,522.44 
C)  $10,485.31 
D)  $10,331.64 
E)  $10,280.48

Question 2

A&B Appliances sells a washer-dryer combination for $1535 cash. C&D Appliances offers the same combination for $1,595 with no payments and no interest for 6 months. Therefore, you can pay $1,535 now or invest the $1535 for 6 months and then pay $1,595. What value would the annual rate of return have to exceed for the second alternative to be your advantage?

Accepted Answer

The answer of A&B Appliances sells a washer-dryer combination for...

Question 3

During its 50-50 Sale, Marpole Furniture will sell its merchandise for 50% down, with the balance payable in six months. No interest is charged for the first six months. What 100% cash price should Marpole accept on a $1,845 chesterfield and chair set if Marpole can earn a rate of return of 2.75% on its funds?

Accepted Answer

The answer of During its 50-50 Sale, Marpole Furniture will...

Question 4

Evelyn put $15,000 into a 90-day term deposit at Laurentian Bank paying a simple interest rate of 3.2%. When the term deposit matured, she invested the entire amount of the principal and interest from the first term deposit into a new 90-day term deposit earning the same rate of interest. What total amount of interest did she earn on both term deposits?

Accepted Answer

The answer of Evelyn put $15,000 into a 90-day term...

Question 5

Calculate the maturity value of a loan of $6,875 after 239 days at 18.3%.

Accepted Answer

A)  $7,698.81 
B)  $7,991.81 
C)  $6,051.19 
D)  $8,238.13 
E)  $8,769.81

Question 6

Calculate the missing values:

Accepted Answer

The answer of Calculate the missing values:
 ...

Question 7

How much money would have to be invested from June 4 until December 22 at 13%, in order to earn $750 in interest?

Accepted Answer

A)  $12,840 
B)  $5,769 
C)  $2,186 
D)  $10,477 
E)  $5,151

Question 8

How many months would it take to earn $3,300 interest on a deposit of $84,000 at 9 ½%?

Accepted Answer

A)  4.14 months 
B)  4.96 months 
C)  11.2 months 
D)  15.3 months 
E)  25.4 months

Question 9

How much will be required on February 1 to pay off a $3,000 loan advanced on the previous September 30 if the variable interest rate began the interval at 10.7%, rose to 11.2% effective November 2, and then dropped back to 11% effective January 1?

Accepted Answer

The answer of How much will be required on February...

Question 10

What will be the maturity value after seven months of $2950 earning interest at the rate of 4.5%?

Accepted Answer

The answer of What will be the maturity value after...

Question 11

Asher cashed in a one-year term deposit after only five months had elapsed. In order to do so, he accepted an interest rate penalty-a reduction from the scheduled 5.5% rate of simple interest. If he was paid $145.83 interest on the $10,000 term deposit, what reduction was made in the per-annum rate of simple interest?

Accepted Answer

The answer of Asher cashed in a one-year term deposit...

Question 12

Calculate the missing value:

Accepted Answer

The answer of Calculate the missing value:
 ...

Question 13

Calculate the missing value:

Accepted Answer

The answer of Calculate the missing value:
 ...

Question 14

If $59,200 grows to $60,000 in 41 days what simple annual interest rate was earned?

Accepted Answer

A)  12.03% 
B)  11.87% 
C)  13.51% 
D)  17.48% 
E)  10.16%

Question 15

How much interest could you earn over 7 months on an investment of $49,000 at 14.75%?

Accepted Answer

A)  $28,583 
B)  $422 
C)  $5,059 
D)  $508 
E)  $4216

Question 16

The total accrued interest owed as of August 31 on a loan advanced the preceding June 3 was $169.66. If the variable interest rate started at 8.75%, rose to 9% effective July 1, and increased another 0.5% effective July 31, what was the principal amount of the loan?

Accepted Answer

The answer of The total accrued interest owed as of...

Question 17

Payments of $100,000 and $150,000 are due to be paid in 45 days and 75 days respectively. If money is worth 7.3%, what is the combined economic value today of the two payments?

Accepted Answer

A)  $574,734 
B)  $246,891 
C)  $249,452 
D)  $276,519 
E)  $229,567

Question 18

Bruce borrowed $6,000 from Darryl on November 23. When Bruce repaid the loan, Darryl charged $203.22 interest. If the rate of simple interest on the loan was 10.75%, on what date did Bruce repay the loan? Assume that February has 28 days.

Accepted Answer

The answer of Bruce borrowed $6,000 from Darryl on November...

Question 19

How much interest will be earned on $5,000 in 5 months if the annual simple interest rate is 1.5%?

Accepted Answer

The answer of How much interest will be earned on...

Question 20

Sheldrick Contracting owes Western Equipment $60,000 payable on June 14. In late April, Sheldrick has surplus cash and wants to settle its debt. If Western can earn 3.6% on its money, how much should Western accept on April 29?

Accepted Answer

The answer of Sheldrick Contracting owes Western Equipment $60,000 payable...

Exam 6: Simple Interest

Two payments of $8,000 in 60 days and $5,000 in 90 days are to be replaced by a payment now and another payment of $2,500 in 30 days. If interest is 7.3% annually, determine the value of the payment now.

Calculate the maturity value of a loan of $6,875 after 239 days at 18.3%.

Calculate the missing values:

How much money would have to be invested from June 4 until December 22 at 13%, in order to earn $750 in interest?

How many months would it take to earn $3,300 interest on a deposit of $84,000 at 9 ½%?

How much will be required on February 1 to pay off a $3,000 loan advanced on the previous September 30 if the variable interest rate began the interval at 10.7%, rose to 11.2% effective November 2, and then dropped back to 11% effective January 1?

What will be the maturity value after seven months of $2950 earning interest at the rate of 4.5%?

Calculate the missing value:

Calculate the missing value:

If $59,200 grows to $60,000 in 41 days what simple annual interest rate was earned?

How much interest could you earn over 7 months on an investment of $49,000 at 14.75%?

The total accrued interest owed as of August 31 on a loan advanced the preceding June 3 was $169.66. If the variable interest rate started at 8.75%, rose to 9% effective July 1, and increased another 0.5% effective July 31, what was the principal amount of the loan?

Payments of $100,000 and $150,000 are due to be paid in 45 days and 75 days respectively. If money is worth 7.3%, what is the combined economic value today of the two payments?

Bruce borrowed $6,000 from Darryl on November 23. When Bruce repaid the loan, Darryl charged $203.22 interest. If the rate of simple interest on the loan was 10.75%, on what date did Bruce repay the loan? Assume that February has 28 days.

How much interest will be earned on $5,000 in 5 months if the annual simple interest rate is 1.5%?

Sheldrick Contracting owes Western Equipment $60,000 payable on June 14. In late April, Sheldrick has surplus cash and wants to settle its debt. If Western can earn 3.6% on its money, how much should Western accept on April 29?