The Mathematics of Money

Copyright © 2008, The McGraw-Hill Companies, Inc.

Exercises 1.2 19

D. Grab Bag

For exercises where the term is given in days, use the simplifi ed exact method (365 days/year) unless otherwise specifi ed.

16. Fishers Capital loaned Valentown Property Services Corp $40,000 for 7 months at 7^3 ⁄^16 % simple interest. Find the total
    interest to be paid.


17. Determine the value of a certifi cate of deposit at the end of its 300-day term if the initial deposit was $5,038.77 and the
    simple interest rate was 6.35%.


18. B.O.Y. McTastee’s Goode-Tyme Burger Emporium temporarily fi nanced a shipment of new fi xtures with a 20-day loan at
    12% simple interest calculated using bankers’ rule. The amount borrowed was $538,926. Find the total interest paid.


19. Elaine loaned Madison $250 for 8 weeks at 7.77% simple interest. How much interest did she earn from this loan?


20. How much interest would you earn if you deposited $808.08 in a certifi cate of deposit paying 1^3 ⁄^4 % simple interest for
    2 months?


21. In order to cover a temporary funding crunch, the Eastfi eld Central School District had to borrow $1,700,000 at
    a simple interest rate of 5.22% for 35 days. How much will the interest on this loan cost the district?


22. Erica borrowed $20,000 for 250 days. The terms of the loan require her to pay 18.99% simple interest calculated using
    bankers’ rule. How much will she need to pay off the loan?


23. Sanjay loaned his brother $25,000 as start-up funds for a new business. They agreed that he would be repaid 21 months
    later, together with simple interest at a rate of 2.50%. How much interest will Sanjay’s brother pay?


24. Ovid National Bank loaned Braeside Corporation $10,983,155.65 for 159 days at 9^5 ⁄^8 % simple interest. How much
    interest will the bank be paid?


25. If you invest $1,935.29 at 6.385% simple interest for 281 days, how much will you earn on the investment?


26. I loaned my brother $250 for 9 months at 5% simple interest. How much interest did he pay?


27. Contrapolar Power Controls borrowed $25,000,000 for 420 days at 6% simple interest. Assuming that bankers’ rule is
    used, what is the total amount the company will need to repay?


28. A roofi ng contractor estimated that a reroofi ng job for a retail store would cost $15,700. The store’s owner cannot
    afford to pay cash, but the roof is leaking badly and needs to be replaced right away. The contractor offers to make