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Exam 10: Simple Interest and Promissory Notes

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Question 31

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Legitimate Financial Services made a loan at 9.75% interest for 254 days. If the amount of interest was $270.50, use the exact interest method to find the amount of principal borrowed. (Round to the nearest whole dollar amount)

A) $3,649
B) $3,987
C) $4,138
D) $3,789

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Question 32

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Xander takes out a loan on March 1 and the loan is for 120 days. The maturity date of the loan is ​July 2.

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Question 33

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To solve for time, use the following formula: ​Time = $\frac {\text { interest } } {\text { principal x rate } }$

Use the exact method (365 days) and the ordinary interest method (360 days) to compute the amount of interest for the following loan, rounding to the nearest cent: $\begin{array} { l l l l l } \text { Principal } & \text { Rate } & \text { Time } & \text { Exact Interest } & \text { Ordinary Interest } \\\$ 36,800 & 8 \% & 59 \text { days } &\end{array}$

Ignacio obtains a loan of $9,500, at 8.75% interest, for $9 \frac { 1 } { 2 }$ months. Find the amount of simple interest. (Round to the nearest cent)

Catherine borrowed $19,000 on June 20, at 10% interest. If the loan was due on September 17, what was the amount of interest on the loan using the exact interest method? (Round to the nearest cent)

Suppose that you took out a loan at 10% interest for 278 days. If the amount of interest was $761.64, use the exact interest method to find the amount of principal you borrowed. (Round to the nearest whole dollar)

Myerson borrowed $8,500 at 9% ordinary interest for 200 days. After 120 days, he made a partial payment of $4,000. What is the final amount due on the loan?

Nate wants to buy a used truck. He took out a loan for $11,111 with his credit union, at 6.55% interest, for 4.5 years. What is the amount of interest on Nate's loan? (Round to the nearest cent)

Determine the number of days of the loan: Loan Date $\quad$ Due Date $\quad$ Number of Days March 12 $\quad$ December 15

A store manager obtained a loan of $25,000, at $6 \frac { 3 } { 8 } \%$ interest, for 15 months to purchase supplies. Find the amount of simple interest. (Round to the nearest cent)

Shaffer's Book Store borrowed $30,000 on March 10 for 90 days. The interest rate was 9% using the ordinary interest method. On day 30 of the loan, Shaffer made a partial payment of $12,000, and on day 70 of the loan Shaffer made a second partial payment of $3,000. What is the new maturity value of the loan?

Jami's Home Repair borrows $3,000, at 12.75% interest, for 330 days. Use the exact interest method to find the amount of interest that the bank will collect. (Round to the nearest cent)

Using exact interest, the amount of interest on a $7,000 loan at 5% interest for 200 days is ​$191.78.

A loan has a due date of December 20. If it is made on September 19, for how many days is the loan?

Jeff was charged 10% interest and paid $175 interest on a simple interest loan for 2 months from his bank. How much did he borrow?

Kate Davidson signed a simple discount note for $9,000. The discount rate is 5%, and the term of the note is 18 months. What is the effective interest rate? (Round to the nearest tenth percent)

Use the exact method (365 days) and the ordinary interest method (360 days) to compute the amount of interest for the following loan, rounding to the nearest cent: $\begin{array} { l l l l l } \text { Principal } & \text { Rate } & \text { Time } & \text { Exact Interest } & \text { Ordinary Interest } \\\$ 116,000 & 9.2 \% & 240 \text { days } & &\end{array}$

Caridad borrowed $15,500 at 11% ordinary interest for 120 days. After 70 days, she made a partial payment of $3,000. What is the final amount due on the loan? (Round to the nearest cent)

The time period between the date a note is discounted and the maturity date is called the ____________________ period.