- In Exercise 4, fi nd the actual simple interest rate (a) paid by Estimable Comestibles, (b) earned by Allegany Federal
Credit Union, and (c) earned by Limestone Capital Ventures. - In Exercise 5, fi nd the actual simple interest rate that (a) Dan paid, (b) the original lender earned, and (c) the secondary
buyer earned. - In Exercise 6, fi nd the actual simple interest rate (a) earned by Kevin, (b) earned by Byron, and (c) paid by Tien.
- In Exercise 7, fi nd the actual simple interest rate (a) that Neela earned, (b) that Vic earned, (c) that Davis paid.
- In Exercise 8, fi nd the actual simple interest rate (a) paid by the hospital, (b) earned by Macedon Funding, and
(c) earned by Palmyra Mutual.
D. Secondary Sales with Interest Rates (Optional)
- A note with a maturity value of $13,576.25 is sold 75 days before maturity with a simple interest rate of 6.75%. Find
the selling price of the note. - A note with a maturity value of $7,645.14 was sold 20 days before maturity. The simple interest rate used to determine
the price was 9.36%. How much was paid for the note? - Howard loaned Jenni $5,000 for 60 days at 7½% simple interest. 45 days later he sold the note to Timo, using a simple
interest rate of 8%. How much did Timo pay for the note? - A $10,000 T bill with 38 days till maturity is sold at a simple interest rate of 5.21%. Find the selling price.
E. Grab Bag
- Maria signed a $2,000 face value promissory note at Montour Falls Savings and Trust, with a term of 100 days and a
simple interest rate of 9.37%. Thirty days later, Watkins Glen National Bank bought the note with a simple discount rate
of 8.95%. Find the price paid for this note. - To fi nance a shipment of new cars, Cantor’s Auto World borrowed $547,813 from Alephone Financial Funding Corp.
by signing a 60-day promissory note with a simple interest rate of 6.44%. Then, 25 days later, the note was sold with
a simple discount rate of 6.75%. What rate of simple interest did Alephone Financial earn on this loan? - Andy loaned Bryan $800 on May 8. Bryan signed a note agreeing to pay the loan back on October 15 together with
5½% simple interest. On July 17, Bryan sold the note to Curt. The discount rate of the sale was 3.88%. What simple
interest rate did Andy earn? Assuming Curt held the note to maturity, what simple interest rate did he earn?
78 Chapter 2 Simple Discount