Question 1

Match the following terms with their definitions.
-Adjusted balance

Accepted Answer

A) 360 days 
B) Principal times rate times time 
C) Cost of borrowing 
D) 365 days 
E) Result of applying the U.S. rule
F)Maturity value
G)Partial payment must be applied to interest first
H)Amount due on due date
I)Amount of money borrowed
J)Consumer groups against it 
A) 360 days 
B) Principal times rate times time 
C) Cost of borrowing 
D) 365 days 
E) Result of applying the U.S. rule
F)Maturity value
G)Partial payment must be applied to interest first
H)Amount due on due date
I)Amount of money borrowed
J)Consumer groups against it

Question 2

Use ordinary interest:
 $$\begin{array} { | l | l | l | l | l | l | l | } 
\hline \text { Principal } & \text { Interest } & \text { Date } & \text { Date } & & \text { Simple } & \text { Amount } \
& \text { Rate } & \text { Borrowed } & \text { Repaid } & \text { Time } & \text { Interest } & \text { Paid Back } \
\hline \$ 12,000 & 9 \% & \text { Apr 5 } & \text { Aug } 9 & \text { A } & \text { B } & \text { C } \
\hline
\end{array}$$

Accepted Answer

A. 126 day

Question 3

Use ordinary interest:
 $$\begin{array} { | l | l | l | l | l | l | l | } 
\hline & \text { Interest } & \text { Date } & \text { Date } & & \text { Simple } & \text { Amount Paid } \
\text { Principal } & \text { Rate } & \text { Borrowed } & \text { Repaid } & \text { Time } & \text { Interest } & \text { Back } \
\hline \$ 8,000 & 12 \% & \text { May 5 } & \text { Aug 10 } & \text { A } & \text { B } & \text { C } \
\hline
\end{array}$$

Accepted Answer

A. 97 Days

Question 4

The U.S. Rule:

Accepted Answer

A) Is used only by banks 
B) Is never used by banks 
C) Allows borrowers to receive interest credit 
D) Is hardly used today 
E) None of these 
A) Is used only by banks 
B) Is never used by banks 
C) Allows borrowers to receive interest credit 
D) Is hardly used today 
E) None of these

Question 5

At maturity, using the U.S. Rule, the interest calculated from the last partial payment is:

Accepted Answer

A) Subtracted from adjusted balance 
B) Added to beginning balance 
C) Subtracted from beginning balance 
D) Added to adjusted balance 
E) None of these 
A) Subtracted from adjusted balance 
B) Added to beginning balance 
C) Subtracted from beginning balance 
D) Added to adjusted balance 
E) None of these

Question 6

Tom borrowed $150,000 for his son Jeff's law school tuition at the University of Mississippi. Tom received a rate of 3.75% for 5 years. Using 360 days in a year, what is the maturity value of the loan?

Accepted Answer

Interest = $150,000

Question 7

18 months is the same as 1.5 years.

Accepted Answer

A) True 
 B)False

Question 8

Interest of $1,632 with principal of $16,000 for 306 days (ordinary interest)results in a rate of:

Accepted Answer

A) 10% 
B) 12% 
C) 12 1/2% 
D) 13% 
E) None of these 
A) 10% 
B) 12% 
C) 12 1/2% 
D) 13% 
E) None of these

Question 9

Match the following terms with their definitions.
-Principal

Accepted Answer

A) 360 days 
B) Principal times rate times time 
C) Cost of borrowing 
D) 365 days 
E) Result of applying the U.S. rule
F)Maturity value
G)Partial payment must be applied to interest first
H)Amount due on due date
I)Amount of money borrowed
J)Consumer groups against it 
A) 360 days 
B) Principal times rate times time 
C) Cost of borrowing 
D) 365 days 
E) Result of applying the U.S. rule
F)Maturity value
G)Partial payment must be applied to interest first
H)Amount due on due date
I)Amount of money borrowed
J)Consumer groups against it

Question 10

The Banker's Rule is the same as the exact interest method.

Accepted Answer

A) True 
 B)False

Question 11

Solve:
 $$\begin{array} { | l | l | l | l | } 
\hline & & & \text { Simple } \
 \text { Principal } & \text { Rate } & \text { Time } & \text { Interest } \
\hline ? & 12 \% & 2 \mathrm { mos } & \$ 960 \
\hline
\end{array}$$

Accepted Answer

The answer of Solve:
 \[\begin{array} { | l | l...

Question 12

Janet Home went to Citizen Bank. She borrowed $7,000 at a rate of 8%. The date of the loan was September 20. Janet hoped to repay the loan on January 20. Assuming the loan is based on ordinary interest, Janet will pay back how much interest on January 20?

Accepted Answer

A) $188.22 
B) $187.18 
C) $189.78 
D) $187.17 
E) None of these 
A) $188.22 
B) $187.18 
C) $189.78 
D) $187.17 
E) None of these

Question 13

Given interest of $11,900 at 6% for 50 days (ordinary interest), one can calculate the principal as:

Accepted Answer

A) $1,428,005.70 
B) $4,128,005.70 
C) $1,428,000.00 
D) $1,420.70 
E) None of these 
A) $1,428,005.70 
B) $4,128,005.70 
C) $1,428,000.00 
D) $1,420.70 
E) None of these

Question 14

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):

Accepted Answer

A) $503.00 
B) $2,500.00 
C) $546.67 
D) $105.33 
E) None of these 
A) $503.00 
B) $2,500.00 
C) $546.67 
D) $105.33 
E) None of these

Question 15

Joyce took out a loan for $21,900 at 12% on March 18, 2018, which will be due on January 9, 2019. Using ordinary interest, Joyce will pay back on Jan. 9 a total amount of:

Accepted Answer

A) $2,167.10 
B) $24,068.10 
C) $24,038.40 
D) $2,138.40 
E) None of these 
A) $2,167.10 
B) $24,068.10 
C) $24,038.40 
D) $2,138.40 
E) None of these

Question 16

The U.S. Rule is a method that allows the borrower to receive proper interest credit when a debt is paid off in more than one payment before the maturity date.

Accepted Answer

A) True 
 B)False

Question 17

Molly Joy owns her own car. Her June monthly interest was $205. The rate is 13 1/2%. Find out what Joy's principal balance is at the beginning of June. Use 360 days. (Do not round denominator in calculation.)

Accepted Answer

$205/(.135

Question 18

Match the following terms with their definitions.
-Banker's rule

Accepted Answer

A) 360 days 
B) Principal times rate times time 
C) Cost of borrowing 
D) 365 days 
E) Result of applying the U.S. rule
F)Maturity value
G)Partial payment must be applied to interest first
H)Amount due on due date
I)Amount of money borrowed
J)Consumer groups against it 
A) 360 days 
B) Principal times rate times time 
C) Cost of borrowing 
D) 365 days 
E) Result of applying the U.S. rule
F)Maturity value
G)Partial payment must be applied to interest first
H)Amount due on due date
I)Amount of money borrowed
J)Consumer groups against it

Question 19

Lou Valdez is buying a truck. His monthly interest is $155 at 10 1/4 %. What is Lou's principal balance after the beginning of November? Use 360 days. Round all answers to the nearest cent. DO NOT round the denominator in your calculation.

Accepted Answer

$155/(.102

Exam 10: Simple Interest

Match the following terms with their definitions. -Adjusted balance

Use ordinary interest: Principal Interest Date Date Simple Amount Rate Borrowed Repaid Time Interest Paid Back \ 12,000 9\% Apr 5 Aug 9 A B C

Use ordinary interest: Interest Date Date Simple Amount Paid Principal Rate Borrowed Repaid Time Interest Back \ 8,000 12\% May 5 Aug 10 A B C

The U.S. Rule:

At maturity, using the U.S. Rule, the interest calculated from the last partial payment is:

Tom borrowed $150,000 for his son Jeff's law school tuition at the University of Mississippi. Tom received a rate of 3.75% for 5 years. Using 360 days in a year, what is the maturity value of the loan?

18 months is the same as 1.5 years.

Interest of $1,632 with principal of $16,000 for 306 days (ordinary interest)results in a rate of:

Match the following terms with their definitions. -Principal

The Banker's Rule is the same as the exact interest method.

Solve: Simple Principal Rate Time Interest ? 12\% 2 \ 960

Janet Home went to Citizen Bank. She borrowed $7,000 at a rate of 8%. The date of the loan was September 20. Janet hoped to repay the loan on January 20. Assuming the loan is based on ordinary interest, Janet will pay back how much interest on January 20?

Given interest of $11,900 at 6% for 50 days (ordinary interest), one can calculate the principal as:

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):

Joyce took out a loan for $21,900 at 12% on March 18, 2018, which will be due on January 9, 2019. Using ordinary interest, Joyce will pay back on Jan. 9 a total amount of:

The U.S. Rule is a method that allows the borrower to receive proper interest credit when a debt is paid off in more than one payment before the maturity date.

Molly Joy owns her own car. Her June monthly interest was $205. The rate is 13 1/2%. Find out what Joy's principal balance is at the beginning of June. Use 360 days. (Do not round denominator in calculation.)

Match the following terms with their definitions. -Banker's rule

Lou Valdez is buying a truck. His monthly interest is $155 at 10 1/4 %. What is Lou's principal balance after the beginning of November? Use 360 days. Round all answers to the nearest cent. DO NOT round the denominator in your calculation.

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