Simple & Compound Interest Questions and Answers

If Rita receives 41 14 interest for a deposit earning 5 simple interest for 140 days what is the amount of her deposit Round your answer to the nearest cent X Suggested tutorial Learn It Calculate the Interest Rate the Present Value or the Time for an Investment Using the Simple Interest Formula Nood

XYZ Corporation invests 6 000 into 91 day treasury bills with an interest rate of 1 6 If the broker charges a 30 commission what is the yield yield

With a mortgage of 48 000 for 15 years with a rate of 8 what are the total finance charges O 34 567 80 5 023 68 545 76 54 576 None of the

With a mortgage of 48 000 for 15 years with a rate of 8 what are the total finance charges 34 567 80 5 023 68 545 76 54 576 None of these

Stu Reese has a 150 000 7 5 mortgage His monthly payment is 1 010 10 His first payment will reduce the principal to an outstanding balance of 149 729 40 149 927 40 72 60 149 910 40

Beverly Frost bought a home for 190 000 with a down payment of 19 000 at 7 for 25 years Since then the rate has risen to 8 How much more would her monthly payment be if she bought the house at 8 208 97 436 40 143 00 111 22 None of these

Jill Corporation accepted a 16 000 note on Aug 12 Terms of the note were 13 for 100 days Jill discounted the note on September 28 at the Reno Bank at 14 The proceeds to Jill would be 341 69 16 236 09 303 00 16 277 78

Darlene Ramirez bought a home for 140 000 She put 20 down with a mortgage rate of 7 5 for 25 years Her yearly payments are 1 776 9 932 04 12 415 20

Average Rate of Return Lakeland Company is considering the purchase of equipment for 175 000 The equipment will expand the Company s production and increase revenue by 40 000 per year Annual cash operating expenses will increase by 12 000 The equipment s useful life is 10 years with no salvage value Lakeland uses straight line depreciation The income tax rate is 25 What is the average rate of return on the investment Do not use negative signs with your answers Increase in revenue 0 Increase in expenses 0 Pretax income from investment 0 Income tax expense 0 Net income from investment 0 Round answer to the nearest whole percentage if applicable Average rate of return on investment

TheMortgageReports com reported the median price of a home sold in the United States hit a record high in 2020 at just above 320 000 Juan Carlos Soto Jr wants to purchase a new home for 306 500 Juan puts 20 down and will finance the remainder of the purchase Compare the following two mortgage options he has 15 years at 4 5 or 20 years at 5 5 Use Table 15 1 Note Round your intermediate calculations and final answers to the nearest cent a Calculate Juan s monthly payment for both the 15 and 20 year mortgage Answer is not complete Monthly payment for 15 year mortgage Monthly payment for 20 year mortgage b Calculate Juan s total cost of interest for both the 15 and 20 year mortgage Answer is not complete Total cost of interest for 15 year mortgage Total cost of interest for 20 year mortgage 92 436 800 c What is the difference in interest paid between 15 and 20 year mortgage

If you buy a home with less than 20 down you will pay an additional monthly fee PMI private mortgage insurance until you reach 20 equity Keep track of when you reach 20 equity so you can request to have your PMI removed Ken Buckmiller s home recently appraised at 297 000 His mortgage was for 282 000 at 5 for 30 years with PMI of 299 17 per month What is his monthly payment plus PMI His mortgage balance is currently 183 000 Has he reached 20 equity Use Table 15 1 Note Round your intermediate calculations and final answer to the nearest cent Monthly payment Has he reached 20 equity Yes

Daniel and Jan agreed to pay 546 000 for a four bedroom colonial home in Waltham Massachusetts with a 50 000 down payment They have a 25 year mortgage at a fixed rate of 6 Use Table 15 1 a How much is their monthly payment Note Round your answer to the nearest cent Monthly payment b After the first payment what would be the balance of the principal Note Round your answers to the nearest cent Payment number Portion to Balance of loan Interest Principal outstanding

Larry s Homemade Ice Cream Shop located in the vibrant Adams Morgan area of Washington D C is known for its gourmet ice cream However some customers have requested healthier low fat options Larry decides to invest in a new machine that makes delicious frozen yogurt The machine manufactured in Italy costs 5 000 plus an additional 1 750 for installation Larry estimates that the machine will generate a net cash flow of 2 000 per year He expects the machine to have a useful life of 10 years a salvage value of 400 Given Larry s cost of capital at 15 percent he questions whether the machine is overpriced Is he right What is the Internal Rate of Return IRR for th investment

Bonita Industries factors 5500000 of its accounts receivables without recourse for a finance charge of 6 The finance company retains an amount equal to 9 of the accounts receivable for possible adjustments What would be recorded as a gain loss on the transfer of receivables O Loss of 330000 O Loss of 1071000 O Gain of 576000 O Loss of 246000

QUESTION This class has 30 students Each student is going to order a Tesla Model Y Please do not actually order a car this is just a hypothetical question For simplicity we will assume the following The price of each car is 60 000 before sales tax The deposit required while ordering is 12 000 Sales tax are 5 00 assessed when the car is delivered Final payment is due when car is delivered The following is a summary of the transactions that occurred April 7 all 30 students made their orders and paid the 12 000 required deposit April 24 Twenty 24 cars are delivered and the 24 students pay the total remaining balances April 29 the remaining 6 cars are delivered and the 6 students pay the total remaining balances REQUIRED Record proper journal entries for TESLA for the above three transactions Journal entries will be graded for proper format and completeness Please review chapter 2 if needed so you can record proper journal entries Hint It is easier to record the journal entries either on a word document or Excel or on a piece of paper and the upload your work When you upload your work ensure you embed the work so it automatically opens on the discussion window without requiring someone to click on it Alternatively create a well formatted table on Canvas like the one below Journal entries that are not properly formatted see chapter 2 will not be graded DESCRIPTION DATE Jan 5 Cash Equipment Capital Lerriuqs Owner invested in the business DEBIT CREDIT 40 000 120 000 160 000

Troy Juth wants to purchase new dive equipment for Underwater Connection his retail store in Colorado Springs He was offered a 81 000 loan at 7 5 for 36 months What is his monthly payment by table lookup Use Table 14 2 Note Round your answer to the nearest cent Monthly payment

Before purchasing a used car Cody Lind checked www kbb com to learn what he should offer for the used car he wanted to buy Then he conducted a carfax com search on the car he found to see if the car had ever been in an accident The Carfax was clean so he purchased the used car for 14 300 He put 1 200 down and financed the rest with a 48 month 8 5 loan What is his monthly car payment by table lookup Use Table 14 2 Note Do not round intermediate calculations Round your answer to the nearest cent Monthly payment

Dallas Pierce s most recent credit card statement follows Her finance charge is 15 APR Calculate Dallas s average daily balance finance charge and new balance Note Round your final answers to the nearest cent 30 day billing cycle 9 2 9 7 Billing date 1 020 Previous balance Payment 160 Credit 9 13 Charge Kohl s 330 9 17 Payment 230 Credit 9 28 Charge WalMart 70 Average daily balance Finance charge New balance I

Complete the following table Purchase price of product Landcruiser Down payment Amount financed Number of monthly payments Amount of monthly payments Total of monthly payments Total finance charge 64 900 48 000 64 428

To save for a new car Trafton invested 7 000 in a savings account that earns 2 5 interest compounded continuously After four years he wants to buy a used car for 8 000 How much money will he need to pay in addition to what is in his savings account Round your answer to the nearest cent Tutorial

Ron Prentice bought goods from Shelly Katz On Sept 12 Shelly gave Ron a time extension on his bill by accepting a 2 700 8 19 day note On Dec 16 Shelly discounted the note at Roseville Bank at 8 Use Days in a year table What proceeds does Shelly Katz receive Note Use 360 days a year Do not round intermediate calculations Round your answer to the nearest cent Proceeds received

On July 24 Sheffield Company discounted at Sunshine Bank a 7 650 maturity value 131 day note dated April 16 Sunshine s discount rate was 10 Use Days in a year table What proceeds did Sheffield Company receive Note Use 360 days a year Do not round intermediate calculations Proceeds received

Robinson s an electrical supply company sold 3 200 of equipment to Jim Coates Wiring Incorporated Coates signed a promissory note May 12 with 3 2 interest The due date was August 10 Short of funds Robinson s contacted Capital One Bank on July 20 the bank agreed to take over the note at a 4 9 discount Use Days in a year table What proceeds will Robinson s receive Note Use 360 days a year Do not round intermediate calculations Round your final answer to the nearest cent Proceeds received

Solve for maturity value discount period bank discount and proceeds Assume a bank discount rate of 9 Use the ordinary interest method Use Days in a year table Note Do not round intermediate calculations Round your final answers to the nearest cent Face value principal 50 500 Rate of interest Length of note Maturity value 13 90 days Date of note September 18 Date note discounted October 9 Discount period days Bank discount Proceeds

The Treasury Department auctioned 11 billion in 3 month bills in denominations of 10 000 at a discount rate of 3 150 What would be the effective rate of interest Note Use calendar year Do not round intermediate calculations Round your answer to the nearest hundredth percent Effective rate of interest

Adams Madison needs 294 200 in 10 years Click here to view factor tables How much must he invest at the end of each year at 15 interest to meet his needs Round factor values to 5 decimal places 1 25124 and final answers to O decimal places e g 458 581 Investment amount

For retirement you deposited 27 per month into an IRA with 3 3 interest over thirty seven years How much money will you pay over that time Select one Oa 21 680 90 O b 35 824 77 O c 14 222 29 Od 19 840 29

Complete the following without using Table12 1 Note Round the Total amount and Total interest to the nearest cent Time Principal Rate of compound Compounded Periods Rate Total amount Total interest years interest 1 410 8 Quarterly

Jazelle Momba wants to visit her family in Zimbabwe in 2028 which is 6 years from now She knows that it will cost approximately 8 300 including flight costs on the ground costs and extra spending money to stay for 4 months If she opens an account that compounds interest at 6 semiannually how much does she need to deposit today to cover the total cost of her visit Use Table 12 3 Note Round your answer to the nearest dollar Deposit

Complete the following using present value Use the Table 12 3 Note Do not round intermediate calculations Round the PV factor to 4 decimal places and final answer to the nearest cent Amount desired at end of period On PV Table 12 3 Length Rate Compounded PV factor used of time Periods used Rate used PV of amount desired at end of period

Sam Long anticipates he will need approximately 226 200 in 15 years to cover his 3 year old daughter s college bills for a 4 year degree How much would he have to invest today at an interest rate of 8 compounded semiannually Use the Table provided Note Do not round intermediate calculations Round your answer to the nearest cent Amount

Lynn Ally owner of a local Subway shop loaned 52 000 to Pete Hall to help him open a Subway franchise Pete plans to repay Lynn at the end of 10 years with 6 interest compounded semiannually How much will Lynn receive at the end of 10 years Use the Table provided Note Do not round intermediate calculations Round your answer to the nearest cent Future value

The stockholders equity of Merkovsky Company at the beginning and end of 2016 totaled 127 000 and 137 000 respectively Assets at the beginning of 2016 were 151 000 If the liabilities of Merkovsky Company increased by 67 000 in 2016 how much were total assets at the end of 2016 Use the accounting equation a 218 000 6 228 000 c 74 000 d 221 000

On April 5 2022 Janeen Camoct took out an 10 25 loan for 31 000 The loan is due March 9 2023 Use ordinary interest to calculate the interest What total amount will Janeen pay on March 9 2023 Ignore leap year Use Days in a year table Note Do not round intermediate calculations Round your answer to the nearest cent Maturity value

8 A successful alumni of UNO wants to establish a scholarship that will pay 2 engineering students 4000 per semester per year assume the students can enroll for only 2 semesters a year If the university earns 6 on endowment accounts what amount must be deposited today by the alumni Hint first calculate the total amount that is required each year for 2 students for 2 semesters

14 A corporate bond is sold for 920 It pays interest of 60 every year and is valid for 10 years At the end of 10 years the bond issuer will redeem the bond for 1000 If you purchase the bond and hold it for the 10 years what would your rate of return be

12 Byron deposited 20 000 in a savings account 15 years ago He withdrew 85 000 today and closed the account Compute the rate of interest on the account

To date Jay Ward has cumulative earnings of 131 600 This week he is paid 3 000 The total amount of Social Security tax for this week is assume a rate of 6 2 on 132 900 income limit for Social Security and 1 45 for Medicare 186 00 80 60 57 66 180 00

Bill Burne s earnings are subject to deductions for Social Security Medicare and FIT This week Bill earns 1 200 Bill who is married is paid weekly and claims three exemptions Assume the Social Security rate is 6 2 and 1 45 for Medicare His net pay for the week is Use Table 9 1 and Table 9 2 in your textbook 528 43 1 026 89 1 690 93 1 609 93

Gracie Shay wants to buy a new Hummer in five years Gracie estimates the cost of the Hummer will be 28 000 If she invests 12 000 now at a rate of 6 compounded semiannually she Will have enough money Will have exactly 16 000 Will have 18 000 Will have 16 126 80 None of these

On May 17 Jane took out a loan for 33 000 at 6 to open her law practice office The loan will mature the following year on January 16 Using the ordinary interest method 360 days what is the maturity value due on January 16 34 342 34 320 34 323 62 34 254

Matty Kaminsky owns a new Volvo His June monthly interest is 400 The rate is 8 Matty s principal balance at the beginning of June is use 360 days 65 740 58 64 470 58 65 704 58 56 470 58

Differential pay schedule is based on FICA Different levels of performance FUTA Gross pay None of these

A 40 000 loan at 4 dated June 10 is due to be paid on October 11 The amount of interest is assume ordinary interest 503 00 2 500 00 546 67 105 33 None of these

Chris puts 5900 into a certificate of deposit CD account at a simple interest rate of 5 per year Answer the following a How much interest will Chris earn in 1 year b How much money will Chris have in his account at the end of the year a Chris will earn in interest in one year Simplify your answer

2 20 points How much will be in a retirement savings account at Chase Bank 15 years from now if you deposit 8 000 now and 10 000 seven years from now The account earns interest at a rate of 6 per year compounded monthly

5 30 points Starting in 2024 the regional government offices health departments and public libraries in the city of Boulder Colorado will adopt a 9 hour day 4 day workweek from the beginning of June through the end of October The shortened workweek will affect 30 of the city s 8000 employees and will save 55 000 per month for those 5 months due to decreased electricity water and maintenance costs If this work schedule persists for the next 15 years what is the future value of the savings at the end of that period i e end of year 2039 Assume an interest rate of 0 6 per month

1 20 points What is the maximum loan amount that Bank of America can provide to an investor given that the investor plans to repay the loan by selling 10 apartment units priced at 250 000 each in 3 years Assume the bank applies a nominal annual interest rate of 12 compounded quarterly

Two coins are tossed Assume that each event is equally likely to occur a Use the counting principle to determine the number of sample points in the sample space b Construct a tree diagram and list the sample space c Determine the probability that no tails are tossed d Determine the probability that exactly one tail is tossed e Determine the probability that two tails are tossed f Determine the probability that at least one tail is tossed OA H T H T O B HH HT TH TT OC H T HH HT TH TT OD H T c The probability that no tails are tossed is Simplify your answer d The probability that exactly one tail is tossed is Simplify your answer e The probability that two tails are tossed is f The probability that at least one tail is tossed is Simplify your answer Simplify your answer

A box contains three cards On one card there is an apple A on another card there is a question mark Q and on the third card there is a rectangle R Two cards are to be selected at random with replacement Complete parts a through e below List the sample space Choose the correct answer below OA AA AQ AR QA QQ QR RA RQ RR OB AA AQ AR RA RQ RR OC AQ QR RA OD AQ AR QA QR RA RQ c Determine the probability that two question marks are selected The probability is Simplify your answer d Determine the probability that a card containing a rectangle and then a card containing a question mark are selected