Ch. 9 - Interest

In the simple interest formula I = PRT, I stands for “dollar amount of interest.”

• True

• False

Suppose you borrow $3,000 at 7.25% interest for 14 months. What is the maturity value?

• $253.75

• $3217.50

• $3253.75

• $217.50

On March 25, you borrow some money for 180 days. What is the maturity date?

• Sep. 21

• Sep. 25

• Sep. 22

• Sep. 23

JoAnn gets a 6.5% $1,300 loan on October 25, 2007. If JoAnn repays the money on April 18, 2008 (a leap year), how much interest does she owe? Assume the lender uses a 365-day year.

• $40.51

• $40.28

• $40.75

• $40.98

You borrow $6,000 for 90 days at 6.5% interest. The lender uses a 365-day year. You make a payment of $1,400 on day 36 (36 days after getting the loan). Calculate your balance after the $1,400 payment is applied.

• $1,361.53

• $4,600

• $4,696.16

• $4,638.47

You get a 7.5% 60-day $3,000 loan. The lender uses a 365-day year and charges you a $300 set-up fee at the time you get the loan. What is your APR?

• 7.5%

• 68.33%

• 75.93%

• 8.33%

You get a loan using the discount method. You sign a note, agreeing to repay the lender $10,000 in 90 days. Assuming a discount rate of 9%, determine the APR.

• 9.34%

• 9.21%

• 9.13%

• 9.00%

Pepper Roark deposits $2,000 in a savings account. The money is left on deposit earning 3.75% compounded annually. Calculate the account balance at the end of 5 years.

• $375

• $2,375

• $404.20

• $2,404.20

What is the APY for 7.5% compounded monthly?

• 0.63%

• 7.76%

• 7.5%

• 7.68%