Question 1

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 2

A loan of $3,300 at 9.25% simple interest was made on March 27. On what date was it repaid if the interest cost was $137.99?

Accepted Answer

The answer of A loan of $3,300 at 9.25% simple...

Question 3

Mario borrowed $6,000 on March 1 at a variable rate of interest. The interest rate began at 7.5%, increased to 8% effective April 17, and then fell by 0.25% effective June 30. How much interest will be owed on the August 1 repayment date?

Accepted Answer

The answer of Mario borrowed $6,000 on March 1 at...

Question 4

Calculate the amount of interest that would be earned on an account of $47,500 if it earned 6.4% for 293 days.

Accepted Answer

A)  $89,072 
B)  $3,040 
C)  $2,440 
D)  $17,442 
E)  $11,298

Question 5

Payments of $850 and $1,140 were scheduled to be paid today and nine months from now, respectively. What total payment today would place the payee in the same financial position as the scheduled payments? Money can earn 8.25%.

Accepted Answer

The answer of Payments of $850 and $1,140 were scheduled...

Question 6

How much interest will an investment of $5,075 earn in two years at an interest rate of 2.25%?

Accepted Answer

The answer of How much interest will an investment of...

Question 7

A principal of $790 grew to $1,000 in 14 months. What annual rate of simple interest was earned?

Accepted Answer

A)  1.89% 
B)  15.23% 
C)  9.67% 
D)  18.00% 
E)  22.78%

Question 8

How much must be placed in a 5-month term deposit earning 4.3%, simple interest, in order to earn $500 interest?

Accepted Answer

The answer of How much must be placed in a...

Question 9

On June 26 Laura put $2,750 into a term deposit until September 3, when she needs the money for tuition, books, and other expenses to return to college. For term deposits in the 60-89-day range, her credit union pays an interest rate of 4.25%. How much interest will she earn on the term deposit?

Accepted Answer

The answer of On June 26 Laura put $2,750 into...

Question 10

How much interest will be earned on $8,000 over a period of four months if the interest rate is 6.5%?

Accepted Answer

A)  $7,830.34 
B)  $173.33 
C)  $169.66 
D)  $130.00 
E)  $26.00

Question 11

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 12

At what simple annual interest rate would $835 grow to $900 in 5 months?

Accepted Answer

A)  16.7% 
B)  4.5% 
C)  7.8% 
D)  18.7% 
E)  17.3%

Question 13

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.

Accepted Answer

The answer of Today is March 25^th. Snow tires that...

Question 14

A $5,000 loan made on March 15 at an interest rate of 7.5%, is to be repaid by payments of $2,000 on June 15, $2,000 on October 15, and a final payment on December 15. What is the amount of the final payment required to pay off the loan in full?

Accepted Answer

The answer of A $5,000 loan made on March 15...

Question 15

After a term of 23 days, a loan at 10.5% has a maturity value of $785.16. What was the principal value of the loan?

Accepted Answer

The answer of After a term of 23 days, a...

Question 16

The simple interest rate on a $5,000 loan is 7%. The loan is to be repaid by four equal payments on dates 100, 150, 200, and 250 days from the date on which the loan was advanced. What is the amount of each payment?

Accepted Answer

The answer of The simple interest rate on a $5,000...

Question 17

A $3,000 obligation due eight months from now is settled by two equal payments, one five months from now and the other nine months from now. If money can earn interest at 16%, what is the size of each payment? Use a focal date five months from now.

Accepted Answer

A)  $3,038.46 
B)  $1,723.64 
C)  $861.82 
D)  $1,479.77 
E)  $2,959.54

Question 18

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.

Accepted Answer

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

Question 19

Alain can purchase an airline ticket for $500 now or can pay $525 in 3 months. If interest is 2.5%, determine whether Alain should purchase the ticket now or in 3 months.

Accepted Answer

A)  Buy now - Savings of $33.88 
B)  Buy now - Savings of $21.74 
C)  No difference between two options 
D)  Buy later - savings of $33.88 
E)  Buy later - savings of $21.74

Question 20

What annual simple interest rate would be needed for $55,000 to grow to $60,000 over a term of 295 days?

Accepted Answer

A)  12.34% 
B)  10.31% 
C)  11.25% 
D)  9.09% 
E)  8.33%

Exam 6: Simple Interest