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The following exercises are a mixture of problems primarily from the topics covered Chapter 2. One of the objectives of these
exercises is to be able to correctly identify which topics and tools are needed for each problem. While the emphasis is on
material covered in Chapter 2, some problems covering Chapter 1 material are also included. All of the material covered in
this chapter is fair game, except for optional topics, which are not included in these exercises.
- A note with a maturity value of $18,340 is due in 90 days, and is discounted at a rate of 11.3%. Find the amount of the
discount and the proceeds of the loan. - A note with a maturity value of $25,000 is discounted at a rate of 14%. The maturity date of the note is December 15,
and the loan date was February 28. (a) Find the loan proceeds. (b) Find the equivalent rate of simple interest for this
loan. - Nancy loaned Lisa $12,700 for 200 days at a simple interest rate of 5.2%. Thirty days later, she sold the note to Lynn at
a simple discount rate of 4¾%. Find the amount Lynn paid for the note. - Find the term of a discount note if the maturity value is $10,000, the proceeds are $9,715, and the simple discount rate
is 5.09%. - Topical Tropical Fruit Company is borrowing money by offering to sell discount notes that mature for $20,000 on
March 30, 2007. On September 25, 2006, Bestinvest Financial Management bought one of the notes at a discount
rate of 6.27%. Find the amount paid for the note, and the simple interest rate for this loan. - If a 6-month note has a simple discount of $200 and a simple interest rate of 8%, what is its maturity value?
- A note that matures for $700 is sold for $680. If the term is 2 months, fi nd the simple discount rate and simple interest
rate. - Tom bought a 180-day note from Jerry for $11,346. The note’s maturity value is $11,857. Find the rate of simple
interest for the note. Find the rate of simple discount for this note. - Hugh borrows $23,000 from Derron, signing a 150-day note at a simple interest rate of 9.3%. Sixty days later, Derron
sells the note to Louise at a discount of 8.26%. How much did Louise pay for the note? - Larry borrows $20,000 from Bob, signing at 215-day note at a simple interest rate of 11.5%. Ninety days later, Andy
buys the note from Bob at a simple discount of 11.8%. (a) How much did Andy pay? (b) What simple interest rate does
Bob actually earn on the transaction? (c) What simple interest rate does Larry actually pay?
CHAPTER 2
EXERCISES