Question

2) Marcia Rodger borrowed $3,500 from Valley Bank at a rate of 9 %. The date of the loan was October 10. Marcia hoped to repay the loan by February 10. Assume the loan is based on ordinary interest. What will the interest cost be? How much will Marcia repay on February 10? What would the payback be if exact interest was used? 3) Mike French borrowed $9,000 at 9% for 85 days. Calculate Mike's proceeds from this simple discount note. Assume ordinary interest. 6 What is the effective rate of interest to nearest hundredth percent? 4) The face value of both a simple interest and a simple discount note are $6,000. If both notes have interest rates of 8% for 90 days, calculate: a. Amount of interest charged for each type of note. b. Amount each borrower would receive. c. Amount payee would receive at maturity. 5) Ryan Furniture wants to buy new office equipment for $8,000 with a 5% cash discount. Ryan needs more cash to pay the bill and is considering discounting a 130-day note dated May 4 with a maturity value of $7,000 at Security Bank at a discount rate of 9% on July 8. 9 Should Ryan discount the note? 6) Mark Ford deposits $11,800 into Role Bank, which pays 8% interest that is compounded quarterly. How much will Mark have in this 11 account at the end of 4 years? 7Roger Smith opened a new savings account. He deposited $35,000 at 6% compounded semiannually. At the start of the fourth year, Roger deposits an additional $10,000 that is also compounded semiannually at 6%. At the end of 6 years, what is the balance in Roger Smith's 13 account? 158) Bill deposited 57,000 in Agree Bankat an interest rate of 8% compounded quarterly. What was the effective rate (APY? 16 9) John Payer, owner of Payer's Garage, estimates he will need $55,000 for new equipment in 8 years. John decided he would put aside the money now so that in 8 years the $55,000 will be available. His bank offers him 8% interest compounded semiannually. How much will John 17 Invest today so his account will have $55,000 in 8 years? Check your answer. Take Home Mid Term

Answer 1

Calculate the amount that is paid back by October 10 the following year as follows:

Calculate the amount that is paid back each month as follows:

            $f9Ucs0KzZrAAAAAASUVORK5CYII=$

Thus, the amount that is paid back each month is.

As February is 4 months ahead of the date of loan i.e. October 10, interest cost is calculated by multiplying with 4 to the amount that is paid back.

Calculate the interest rate as follows:

$nI6xnVuEAAAAABJRU5ErkJggg==$

Thus, the interest cost is.

Calculate the amount that is repaid on February 10 as follows:

           

Thus, the amount that is repaid on February 10 is.