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 |
Sample
Exam Three |
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Simple
Interest/Consumer Credit
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Part
1: Complete the table as given. Show Work in Boxes at
bottom of page.
(6 point each) |
Prob.
# |
Basic
Formula |
Appropriate
Variation |
I |
P |
r |
Time |
A
= P+I
or
A=P(1+rt) |
| 1 |
|
|
|
$2,400 |
9.5%
simple |
6 months |
|
| 2 |
|
|
$63.25 |
$825 |
|
18
months |
|
| 3 |
|
|
$24.94 |
|
10.75%
simple |
6 months |
|
| 4 |
|
|
$42.30 |
$940 |
6.75%
simple |
|
|
| 5 |
|
|
|
$1,500 |
8.75% |
3 months |
|
| 6 |
|
|
|
$7,000 |
5%
ordinary |
120 days |
|
| 7 |
|
|
|
$7,000 |
6.25%
exact |
90 days |
|
| 8 |
|
|
$4.83 |
$322 |
ordinary |
May 15
to July 14 |
|
| 9 |
|
|
Do not
Calculate
I |
$1,555 |
7.5 %
exact |
70 days |
|
| 10 |
|
|
Do not
calculate I |
|
10.25%
simple |
8months |
$468.95 |
1.
|
2. |
3. |
4. |
5. |
6.
|
7. |
8. |
9. |
10. |
Part 2: Provide
solutions to the following problems (10 points each).
Problem
11: An invoice for $500 contains terms 3/15, n/45.
Find the ordinary interest rate at which a person can
afford to borrow in order to take advantage of the cash
discount.
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Problem
12: For the given invoice amount, cash discount
terms and ordinary interest rate, find how much could be
saved on the transaction.
$800; 2/10, n/60; 8%
|
Problem
13: Partial payments of $500, $300, and $400 are made
on a one-year loan of $2000 at 10% simple interest. If the
payments are made at 3-month intervals, find the amount
due at the end of the year.
|
Problem
14: Calculate the finance charge (FC) as the average
daily balance (ADB) at a 1.75% per month interest rate for
the credit card account with the monthly activity as
defined by the following table.
|
Date
|
Days
|
Transaction
|
Balance
|
Days
x Balance
|
| 4/15 |
|
Beginning
of Billing Cycle |
$316.40 |
|
| 4/20 |
|
Payment
$150.00 CR |
|
|
| 4/22 |
|
Return
$27.16 CR |
|
|
| 4/28 |
|
Cash
Advance $50.00 |
|
|
| 4/30 |
|
Purchase
$65.00 |
|
|
| 5/15 |
|
Close
of Billing Cycle |
|
|
|
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Copyright © Jim Pack,
2000. All Rights Reserved. Last modified
11/20/07
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