Chapter Questions
Calculate the simple interest and maturity value for the following problems. Round to the nearest cent as needed.$$\begin{array}{ccccc} \text { Principal } & \text { Interest rate } & \text { Time } & \text { Simple interest } & \text { Maturity value } \\ \$ 16,000 & 4 \% & 18 \mathrm{mo.} & & \\\end{array}$$
Calculate the simple interest and maturity value for the following problems. Round to the nearest cent as needed.$$\begin{array}{ccccc} \text { Principal } & \text { Interest rate } & \text { Time } & \text { Simple interest } & \text { Maturity value } \\ \$ 19,000 & 6 \% & 1 \frac{3}{4} \mathrm{yr} \text {. } & & \\\end{array}$$
Calculate the simple interest and maturity value for the following problems. Round to the nearest cent as needed.$$\begin{array}{ccccc} \text { Principal } & \text { Interest rate } & \text { Time } & \text { Simple interest } & \text { Maturity value } \\ \$ 18,000 & 7 \frac{1}{4} \% & 9 \text { mo. } & & \\\end{array}$$
Complete the following, using ordinary interest: $$\begin{array}{lllllll}\text { Principal } & \begin{array}{l}\text { Interest } \\\text { rate }\end{array} & \begin{array}{l}\text { Date } \\\text { borrowed }\end{array} & \begin{array}{l}\text { Date } \\\text { repaid }\end{array} & \begin{array}{l}\text { Exact } \\\text { time }\end{array} & \text { Interest } & \begin{array}{l}\text { Maturity } \\\text { value }\end{array} \\\$ 1,000 & 8 \% & \text { Mar. } 8 & \text { June } 9 & & &\end{array}$$
Complete the following, using ordinary interest: $$\begin{array}{lllllll}\text { Principal } & \begin{array}{l}\text { Interest } \\\text { rate }\end{array} & \begin{array}{l}\text { Date } \\\text { borrowed }\end{array} & \begin{array}{l}\text { Date } \\\text { repaid }\end{array} & \begin{array}{l}\text { Exact } \\\text { time }\end{array} & \text { Interest } & \begin{array}{l}\text { Maturity } \\\text { value }\end{array} \\\$ 585 & 9 \% & \text { June. } 5 & \text { Dec. } 15 & & &\end{array}$$
Complete the following, using ordinary interest: $$\begin{array}{lllllll}\text { Principal } & \begin{array}{l}\text { Interest } \\\text { rate }\end{array} & \begin{array}{l}\text { Date } \\\text { borrowed }\end{array} & \begin{array}{l}\text { Date } \\\text { repaid }\end{array} & \begin{array}{l}\text { Exact } \\\text { time }\end{array} & \text { Interest } & \begin{array}{l}\text { Maturity } \\\text { value }\end{array} \\\$ 1,200 & 12 \% & \text { July } 7 & \text { Jan. } 10 & & &\end{array}$$
Complete the following, using exact interest: $$\begin{array}{lllllll}\text { Principal } & \begin{array}{l}\text { Interest } \\\text { rate }\end{array} & \begin{array}{l}\text { Date } \\\text { borrowed }\end{array} & \begin{array}{l}\text { Date } \\\text { repaid }\end{array} & \begin{array}{l}\text { Exact } \\\text { time }\end{array} & \text { Interest } & \begin{array}{l}\text { Maturity } \\\text { value }\end{array} \\\$ 1,000 & 8 \% & \text { Mar. } 8 & \text { June } 9 & & &\end{array}$$
Complete the following, using exact interest: $$\begin{array}{lllllll}\text { Principal } & \begin{array}{l}\text { Interest } \\\text { rate }\end{array} & \begin{array}{l}\text { Date } \\\text { borrowed }\end{array} & \begin{array}{l}\text { Date } \\\text { repaid }\end{array} & \begin{array}{l}\text { Exact } \\\text { time }\end{array} & \text { Interest } & \begin{array}{l}\text { Maturity } \\\text { value }\end{array} \\\$ 585 & 9 \% & \text { June } 5 & \text { Dec. } 15 & & &\end{array}$$
Complete the following, using exact interest: $$\begin{array}{lllllll}\text { Principal } & \begin{array}{l}\text { Interest } \\\text { rate }\end{array} & \begin{array}{l}\text { Date } \\\text { borrowed }\end{array} & \begin{array}{l}\text { Date } \\\text { repaid }\end{array} & \begin{array}{l}\text { Exact } \\\text { time }\end{array} & \text { Interest } & \begin{array}{l}\text { Maturity } \\\text { value }\end{array} \\\$ 1,200 & 12 \% & \text { July } 7 & \text { Jan } 10& & &\end{array}$$
Solve for the missing item in the following (round to the nearest hundredth as needed):$$\begin{array}{llll}\text { Principal } & \text { Interest rate } & \begin{array}{l}\text { Time } \\\text { (months or years) }\end{array} & \begin{array}{l}\text { Simple } \\\text { interest }\end{array} \\\$ 400 & 5 \% & ? & \$ 100\end{array}$$
Solve for the missing item in the following (round to the nearest hundredth as needed):$$\begin{array}{llll}\text { Principal } & \text { Interest rate } & \begin{array}{l}\text { Time } \\\text { (months or years) }\end{array} & \begin{array}{l}\text { Simple } \\\text { interest }\end{array} \\ ? & 7 \% & 1 \frac{1}{2} \text { years } & \$ 200\end{array}$$
Solve for the missing item in the following (round to the nearest hundredth as needed):$$\begin{array}{llll}\text { Principal } & \text { Interest rate } & \begin{array}{l}\text { Time } \\\text { (months or years) }\end{array} & \begin{array}{l}\text { Simple } \\\text { interest }\end{array} \\\$ 5,000 & ? & 6 \text { months } & \$ 300\end{array}$$
Use the U.S. Rule to solve for total interest costs, balances, and final payments (use ordinary interest).Given Principal: $$\$ 10,000,8 \%, 240$$ daysPartial payments: On 100th day, $$\$ 4,000$$On 180 th day, $$\$ 2,000$$
The Kansas City Star on March 11,2007 featured a story on emer gency savings in the U.S. Money in a checking account will not generate much interest. So Peggy Cooper decides to place her $$\$ 1,300$$ in a savings account with a $5 \frac{1}{8}$ percent return. After 7 months, Peggy needs to withdraw her savings. (a) What is the amount of interest she earned? (b) How much will Peggy receive from the bank? Round to the nearest cent.
Kim Lee borrowed $$\$ 10,000$$ to pay for her child's education at River Community College. Kim must repay the loan at the end of 11 months in one payment with $6 \frac{1}{2} \%$ interest. How much interest must Kim pay? What is the maturity value?
On September 12, Jody Jansen went to Sunshine Bank to borrow $$\$ 2,300$$ at $9 \%$ interest. Jody plans to repay the loan on January 27. Assume the loan is on ordinary interest. What interest will Jody owe on January 27? What is the total amount Jody must repay at maturity?
Kelly O'Brien met Jody Jansen (Problem 10-16) at Sunshine Bank and suggested she consider the loan on exact interest. Recalculate the loan for Jody under this assumption.
May 3, 2007, Leven Corp. negotiated a short-term loan of $$\$ 685,000$$. The loan is due October 1,2007 , and carries a $6.86 \%$ interest rate. Use ordinary interest to calculate the interest. What is the total amount Leven would pay on the maturity date?
Gordon Rosel went to his bank to find out how long it will take for $$\$ 1,200$$ to amount to $$\$ 1,650$$ at $8 \%$ simple interest. Please solve Gordon's problem. Round time in years to the nearest tenth.
Bill Moore is buying a van. His April monthly interest at $12 \%$ was $$\$ 125$$. What was Bill's principal balance at the beginning of April? Use 360 days.
On April 5, 2008, Janeen Camoct took out an $8 \frac{1}{2} \%$ loan for $$\$ 20,000$$. The loan is due March 9,2009 . Use ordinary interest to calculate the interest. What total amount will Janeen pay on March 9, 2009?
Sabrina Bowers took out the same loan as Janeen (Problem 10-21). Sabrina's terms, however, are exact interest. What is Sabrina's difference in interest? What will she pay on March 9, 2009?
Max Wholesaler borrowed $$\$ 2,000$$ on a $10 \%, 120$-day note. After 45 days, Max paid $$\$ 700$$ on the note. Thirty days later, Max paid an additional $$\$ 630$$. What is the final balance due? Use the U.S. Rule to determine the total interest and ending balance due. Use ordinary interest.
Limits are needed on payday-lending businesses, according to an article in the February 14,2007 issue of The Columbian (Vancouver, WA). Interest rates on payday loans are so outrageous that the payday-lending industry only has itself to blame for states moving to rein them in. A typical $$\$ 100$$ loan is payable in two weeks at $$\$ 115$$. What is the percent of interest paid on this loan? Do not round denominator before dividing.
Availability of state and federal disaster loans was the featured article in The Enterprise Ledger (AL) on March 14, 2007. Alabama Deputy Treasurer Anthony Leigh said the state program allows the state treasurer to place state funds in Alabama banks at 2 percent below the market interest rate. The bank then agrees to lend the funds to individuals or businesses for 2 percent below the normal charge, to help Alabama victims of disaster to secure emergency short term loans. Laura Harden qualifies for an emergency loan. She will need $$\$3,500$$ for 5 months and the local bank has an interest rate of $4 \frac{3}{4}$ percent. (a) What would have been the maturity value of a non-emergency loan? (b) What will be the maturity value of the emergency loan? Round to the nearest cent.
On September 14, Jennifer Rick went to Park Bank to borrow $$\$ 2,500$$ at $11 \frac{3}{4} \%$ interest. Jennifer plans to repay the loan on January 27 . Assume the loan is on ordinary interest. What interest will Jennifer owe on January 27 ? What is the total amount Jennifer must repay at maturity?
Steven Linden met Jennifer Rick (Problem 10-26) at Park Bank and suggested she consider the loan on exact interest. Recalculate the loan for Jennifer under this assumption.
Lance Lopes went to his bank to find out how long it will take for $$\$ 1,000$$ to amount to $$\$ 1,700$$ at $12 \%$ simple interest. Can you solve Lance's problem? Round time in years to the nearest tenth.
Margie Pagano is buying a car. Her June monthly interest at $12 \frac{1}{2} \%$ was $$\$ 195$$. What was Margie's principal balance at the beginning of June? Use 360 days. Do not round the denominator before dividing.
Shawn Bixby borrowed $$\$ 17,000$$ on a 120 -day, $12 \%$ note. After 65 days, Shawn paid $$\$ 2,000$$ on the note. On day 89 , Shawn paid an additional $$\$ 4,000$$. What is the final balance due? Determine total interest and ending balance due by the U.S. Rule. Use ordinary interest.
Carol Miller went to Europe and for got to pay her $$\$ 740$$ mortgage payment on her New Hampshire ski house. For her 59 days overdue on her payment, the bank char ged her a penalty of $$\$ 15$$. What was the rate of interest charged by the bank? Round to the nearest hundredth percent (assume 360 days).
Abe Wolf bought a new kitchen set at Sears. Abe paid off the loan after 60 days with an interest charge of $$\$ 9$$. If Sears charges $10 \%$ interest, what did Abe pay for the kitchen set (assume 360 days)?
Joy Kirby made a $$\$ 300$$ loan to Robinson Landscaping at $11 \%$. Robinson paid back the loan with interest of $$\$ 6.60$$. How long in days was the loan outstanding (assume 360 days)? Check your answer .
Molly Ellen, bookkeeper for Keystone Company, forgot to send in the payroll taxes due on April 15 . She sent the payment November 8 . The IRS sent her a penalty charge of $8 \%$ simple interest on the unpaid taxes of $$\$ 4,100$$. Calculate the penalty. (Remember that the government uses exact interest.)
Oakwood Plowing Company purchased two new plows for the upcoming winter . In 200 days, Oakwood must make a single payment of $$\$ 23,200$$ to pay for the plows. As of today, Oakwood has $$\$ 22,500$$. If Oakwood puts the money in a bank today, what rate of interest will it need to pay of $f$ the plows in 200 days (assume 360 days)?
The Downers Grove Reporter ran an ad for a used 1998 Harley-Davidson Sportster 883 for $$\$ 6,750$$. Patrick Schmidt is interested in the motorcycle but does not have the money right now . Patrick contacted the owner on October 19, and he agreed to give Patrick a loan plus $5.5\%$ exact interest. The loan must be paid back by December 22 of the same year . The First National Bank will lend the $$\$ 6,750$$ at $5 \%$. Patrick would have 3 months to pay of $f$ the loan. (a) What is the total amount Patrick will have to pay the owner of the motorcycle assuming exact interest? (b) What is the total amount Patrick will have to pay the bank? (c) Which option offers the most savings to Patrick? (d) How much will Patrick save?
Janet Foster bought a computer and printer at Computerland. The printer had a $$\$ 600$$ list price with a $$\$ 100$$ trade discount and $2 / 10, \mathrm{n} / 30$ terms. The computer had a $$\$ 1,600$$ list price with a $25 \%$ trade discount but no cash discount. On the computer, Computerland offered Janet the choice of (1) paying $$\$ 50$$ per month for 17 months with the 18th payment paying the remainder of the balance or (2) paying $8 \%$ interest for 18 months in equal payments.a. Assume Janet could borrow the money for the printer at $8 \%$ to take advantage of the cash discount. How much would Janet save (assume 360 days)?b. On the computer, what is the difference in the final payment between choices 1 and 2 ?