Beruflich Dokumente
Kultur Dokumente
Robert A. Brechner
Copyright © 2003 Thomson/South-Western
Level 1
Chapter 10 - Section II - Exercise 22
Steven Teeter took out a loan for $3,500 at the Fortune Bank for 270 days. If the bank
uses the ordinary interest method, what rate of interest was charged if the amount
of interest was $269? Round your answer to the nearest tenth percent.
Interest = $269.00
Principal = $3,500.00
Level 2
Chapter 10 - Section I - Exercise 35
What is the maturity value of a $60,000 loan, for 100 days, at 12.2% interest, using
the exact interest method?
Principal = $60,000.00
Rate = 12.2%
Level 3
Chapter 10 - Section I - Exercise 38
You are the accounting manager for Eurostyle, Inc., a manufacturer of men's and
women's clothing. The company needs to borrow $1,800,000 for 90 days in order to
purchase a large quantity of material at "closeout" prices. The interest rate for such
loans at your bank, Century Bank, is 11% using ordinary interest.
Principal = $1,800,000.00
Rate = 11.0%
Time (days) = 90
b. After making a few "shopping" calls, you find that Metro Bank will lend at 11%,
using exact interest. What is the amount of interest on this offer?
Principal = $1,800,000.00
Rate = 11.0%
Time (days) = 90
c. In order to keep your business, Century bank has counteroffered with a loan at
10.5%, using ordinary interest. What is the amount of interest on this offer?
Principal = $1,800,000.00
Rate = 10.5%
Time (days) = 90
d. (Challenge) If Metro wants to beat Century's last offer (part c) by charging $1,250
less interest, what rate, rounded to hundredths, must they quote, using exact interest?
Interest = $1,250.00
Principal = $1,800,000.00
Time (days) = 90
Rate = 0.28%
Contemporary Mathematics for Business and Consumers, Third Edition
Robert A. Brechner
Copyright © 2003 Thomson/South-Western
Level 3
Chapter 10 - Section II - Exercise 21
Note: Use Excel's Roundup function when you calculate the number of days.
Interest = $9,600.00
Principal = $225,000.00
Rate = 9.30%
Level 2
Chapter 10 - Section II - Exercise 23
Kathleen Murphrey borrowed money to buy a car at 13.5% simple interest from her
credit union. If the loan was repaid in 2 years and the amount of interest was $2,700,
how much did Kathleen borrow?
Interest = $2,700.00
Rate = 13.5%
Time (years) = 2
Level 1
Chapter 10 - Section III - Exercise 21
Time (days) = 95
Rate = 12%
Time (days) = 95
Days remaining = 25
Proceeds = $40,836.81
Contemporary Mathematics for Business and Consumers, Third Edition
Robert A. Brechner
Copyright © 2003 Thomson/South-Western
Level 3
Chapter 10 - Assessment Test - Exercise 31
Ann Veith borrowed $16,000 at 14% ordinary interest, for 88 days. On day 30
of the loan, she made a partial payment of $7,000. What is the new maturity value
of the loan?
6,813.33333333333
Face value = $9,186.67
Rate = 14%
Time (days) = 58
Level 2
Chapter 10 - Assessment Test - Exercise 33
Ransford Morgan signed a $30,000 sumple discount promissory note at the Plantation
Bank. The discount rate was 13% ordinary interest, and the note was made on
August 9 for 95 days.
Rate = 13.0%
Time (days) = 95
Proceeds = $28,970.83
c. What is the effective rate of interest of the note? Round the answer to the nearest
hundredth percent.
Level 3
Chapter 10 - Assessment Test - Exercise 35
You are the accountant for Leather City, a retail furniture store. Recently, an order of
sofas and chairs was received from a manufacturer with terms of 3/5, n/45. The order
amounted to $230,000, and Leather City can borrow money at 13% ordinary interest.
a. How much can be saved by borrowing the funds for 30 days to take advantage of
the cash discount? (Remember, Leather City only has to borrow the net amount due,
after the cash discount is taken.)
Principal = $223,100.00
Rate = 13.0%
Time (days) = 30