# Chapter 10 11 Test

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```					                            CHAPTERS 10 AND 11 TEST
Student Name_____________________________              Score_______________________

Chapter 10          Simple Interest
Round all final answers to nearest cent.

1. Woody’s Cafe Real Estate tax of \$1,110.85 was due on November 1, 2006. Due to
financial problems, Woody was unable to pay his cafe real estate tax bill until January
15, 2007. The penalty for late payment is 8 1 % ordinary interest. (A) What is the
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penalty Woody will have to pay and (B) what will Woody totally pay on January 15?

2. Angel Hall borrowed \$82,000 for her granddaughter’s college education. She must
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repay the loan at the end of 9 years with 9 % interest. What is the maturity value
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Angel must repay?

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3. On September 8, Pat Quinn borrowed \$9,000 from Queen bank at 10       % interest. Pat
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plans to repay the loan on February 17. Assume the loan is on ordinary interest. How
much will Pat repay on February 17?

4. Amy Koy met Pat Quinn (Problem No. 3) at Queen Bank. After talking with Pat, Amy
decided she would like to consider the same loan on exact interest. Calculate the loan
for Amy under this assumption.

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% interest. What is
5. Lou Valdez is buying a truck. His monthly interest was \$155 at 10
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Lou’s principal balance after the beginning of November? Use 360 days. DO NOT
round the denominator in your calculation.

6. Lisa Kane borrowed \$8,000 on an 8% 60-day note. After 15 days, Lisa paid \$2,000 on
the note. On day 45, Lisa paid \$1,000 on the note. What is the total interest and ending
balance due by the U.S. rule? Use ordinary interest.
Chapter 11
Structure of Promissory Notes, Simple Discount
Notes, and the Discounting Process
Compute

(A) Bank discount; (B) Proceeds for the following simple discount (use ordinary interest);
and (C) the effective interest rate to nearest hundredth percent. (Do not round

7. \$9,000              14%             110 days                                      7. A. ___________
(face)            (dis. rate)        (time)
B. ___________

C. ___________

Calculate

Maturity value for this interest-bearing note using ordinary interest.

8. \$42,000           79 days           13%                                           8. _____________

Complete the following for these interest-bearing notes that are discounted at 11%.

Date
Rate of                  Maturiy   Note      Date Note   Discount
Principal   Interest       Time       Value    Made     Discounted    Period      Proceeds

9.       \$60,000       14%         60 days        A     July 5    July 20        B            C

10.      \$90,000       10%         150 days       A     May 3     June 12        B            C

9. A. __________
B. __________
C. __________

10. A. _________
B. __________
C. __________

11. Given the following, calculate the effective rate (to nearest hundredth percent).

Treasury Bill \$10,000
Terms 13 week
Rate 9%
11. ___________

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