Question

Answer the following simple interest questions:

1. Jeff borrowed $25 from his dad to buy a fishing license and promised to pay his dad back in one month. His dad agreed, but said that Jeff must pay 15% annual interest. How much interest will Jeff pay?

2. Anna Maria applied for and received a loan to pay for college. She borrowed $25,000. She must pay the loan back in five years with annual interest of 4%. How much money will she pay when she pays off the loan?

3. Daunell purchased a new TV on September 15th. The cost of the TV was $2,750 and she has until January 15th to pay that amount to the retailer. The retailer has added 21% annual interest to the price of the TV. When Daunell pays off the TV on January 15th, how much will she pay?

4. Joe bought a boat from his brother on March 1st with a promise to write a check for the price of the boat, $5,000, on March 4th. On March 2nd Joe lost his job so his brother said he could pay the money when he found a new job. Six months later Joe still didn’t have a job, but he was tan from a lot of water skiing. Joe’s brother said that Joe needed to pay for the boat in 3 months at 5% annual interest. How much will Joe pay his brother in 3 months?

5. Mary borrowed $5 from her older brother and paid him back $7 dollars three days later. What annual interest rate did her older brother charge her?

6. Rachel, Mary’s sister, also borrowed money from her older brother. She repaid him $10 three days after he loaned her money. He charged her 75% annual interest. What amount did Rachel borrow?

Answer 1

	Simple Interest =Principal*Interest Rate*Time in year
1	Principal	$                                           25.00
	Interest Rate	15%
	Time	1 month
	Interest	$                                             0.31	=25*15%*1/12
2	Principal	$                                  25,000.00
	Interest Rate	4%
	Time	5.00	years
	Interest	$                                     5,000.00	=25000*4%*5
	Money to be paid (Principal +interest)	$                                  30,000.00	=25000+5000
3	Principal	$                                     2,750.00
	Interest Rate	21%
	Time	123.00	days
	Interest	$                                        194.61	=2750*21%*123/365
	Money to be paid (Principal +interest)	$                                     2,944.61	=2750+194.61
4	Principal	5000
	Interest Rate	5%
	Time	9	months
	Interest	$                                        187.50	=5000*5%*9/12
	Money to be paid (Principal +interest)	$                                     5,187.50	=5000+187.5