Question 1

What annual rate of return would money have to earn for $1975.00 to be equivalent to $1936.53 paid 100 days earlier?

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Question 2

Joyce had $2,149 in her daily interest savings account for the entire month of June. Her account was credited with interest of $2.65 on June 30 (for the exact number of days in June). What annual rate of simple interest did her balance earn?

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Question 3

Ethel invested $3,450 of Fred's money on February 3. Lucy had promised Ethel that the investment would earn an interest rate of 55%. On February 27 of the same year, Ethel cashed in her investment and received the interest as Lucy had promised. How much interest had she earned?

Accepted Answer

A)  $124.77 
B)  $189.75 
C)  $218.63 
D)  $64.98 
E)  $90.87

Question 4

Calculate the missing value:

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The answer of Calculate the missing value:
 ...

Question 5

Determine the amount of (simple) interest that would be earned over eight months at 26% on an investment of $43,500.

Accepted Answer

A)  $11,309.99 
B)  $2,352.48 
C)  $7,540.00 
D)  $6,786.00 
E)  $5,367.03

Question 6

How many days would it take for $9,500 to grow to $10,000 at 7%?

Accepted Answer

A)  75 
B)  188 
C)  261 
D)  365 
E)  275

Question 7

An $18,000 payment due in 300 days is to be replaced by three equal payments now, in 150 days and 250 days. Determine the value of the payments if interest is 10.2% annually, and the focal point is now.

Accepted Answer

A)  $6,142.51 
B)  $5,913.75 
C)  $5,823.89 
D)  $5,738.38 
E)  $5,421.03

Question 8

Compare the economic values of two options given an annual rate of 4.5%. Option 1 - $1,100 in 1 month and $850 in 3 months. Option 2 - $1,050 in 6 months and $925 in 9 months. Given the following information, choose the best option.

Accepted Answer

A)  Option 1 - benefit of $14.74 
B)  Option 1 - benefit of $24.74 
C)  No difference between options 
D)  Option 2 - benefit of $14.74 
E)  Option 2 - benefit of $24.74

Question 9

Albert loaned $850,000 to Batman on March 17. On January 9 of the following year, Batman paid to Albert the $49,000 of interest that had accumulated on the debt up to that time. What simple rate of interest was Albert charging on this loan?

Accepted Answer

A)  7.06% 
B)  25.68% 
C)  31.40% 
D)  9.65% 
E)  17.34%

Question 10

What payment on August 19 is equivalent to a $1,000 payment on the preceding January 19, if the rate of interest is 4.5%?

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Question 11

Payments of $900 and $1000 are due in 30 days and 210 days respectively. If money can be invested at 7.75% what single payment 90 days from now is equivalent to that payment stream?

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Question 12

Today is March 25^th. Snow tires that you need are available today at a sale price of $89.95 each. If you wait until October 1 to buy the tires, you will pay the full price of $107.50 each. If you buy the tires today, you will need to borrow money at 12% per annum simple interest. Should you buy the tires today or wait until October 1? Explain.

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Question 13

A $3000 loan at 5% was made on March 1. Two payments of $1000 each were made on May 1 and June 1. What payment on July 1 will pay off the loan?

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Question 14

An investment earned $156.25 interest in 30 months. What was the simple annual rate of interest?

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Question 15

Determine a) whether the earlier or later payment has the greater economic value at the given interest rate and b) the interest rate at which the two payments would be equivalent:

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Question 16

Kristina earned $33.70 at an interest rate of 2.5% from November 29 to April 1. What amount did she invest? Assume that February has 28 days.

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Question 17

Calculate the amount of interest owed on the repayment date:

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Question 18

A principal of $2,680 is invested for 2.5 years at a rate of 12%. What amount of interest will be earned?

Accepted Answer

A)  $321.60 
B)  $3,001.60 
C)  $3,484.00 
D)  $290.33 
E)  $804.00

Question 19

On May 27, Kristina made an investment that earned an interest rate of 9.4%. By November 6 the investment's value had increased to $77,000. What amount of interest had Kristina earned?

Accepted Answer

A)  $3,619 
B)  $3,102 
C)  $3,232 
D)  $5,112 
E)  $7,238

Question 20

What single payment, 45 days from now, is economically equivalent to the combination of three payments of $1750 each: one due 75 days ago, the second due today, and the third due in 75 days from now? Money is worth 9.9% per annum.

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The answer of What single payment, 45 days from now,...

Exam 6: Simple Interest