01. Find the accumulated amount. P 1,000 5,250 7,235 10,500 300 02. Find the accumulated amount. P 3,500 3,750 1,875 12,500 250 i (simple interest) 0.5% 5% 2.5% 7% 10% i (simple interest) 0.10% 4% 1.25% 3% 8% t months 1 year and 9 months 3 years 24 months 215 days t months 4 years 3 years & 3 months 18 months 260 days 03. What amount should be paid on the maturity date to settle a one hundred sixty day loan if the present value is 6,000 at 84% simple interest? 04. What amount should be paid on the maturity date to settle a ninety-day loan if the present value is 2,000 at 8 1/5% simple interest? 05. Find the amount invested on Nov 12, Y if the maturity value on Feb 12, Y+1 will be 20,415 at 8 1/8% simple interest? 06. Find the amount invested from Dec 11, Y to March 1, Y+1 at 8 3/8% simple interest if the maturity value is 5,000. 07. Suppose 1,000 is invested at 8% interest, how long would it take to have 2,500? 08. How long would it take to have 500 in the account if 300 is invested at 4%? 09. Sam received 10,000 after 3 years of investing 4,000. At what interest rate is this possible? 10. Angel planned to receive 12,000 after 4 years of investing 3,000. At what interest rate is this possible? EXERCISES 1.5 1. 2. 3. 4. 5. 6. 7. Find the present value. 8. F 1,000 5,250 7,235 10,500 300 Find the present value. i (simple interest) 0.5% 5% 2.5% 7% 10% F 3,500 3,750 1,875 12,500 250 t 6mos i (simple interest) 0.10% 4% 1.25% 3% 8% t 9mos 4yrs 3 yrs & 3 mos. 180s 260 ys What is the present value of 1,500 due in 7 years and 6 months if money is worth 8 2/5% simple interest? What is the present value of 4,500 for 3 years and 8 months at 11 7/8% simple interest? What is the principal invested at 11 %4% simple interest on Sept 15, Y that will amount to 6,000 on Jan 26, Y + 1? 1yr and 9 mos 3 yrs 240s 215 days Find the principal that will amount to 5,000 in 30 months if money is worth 7.5% simple interest. What sum of money must be invested for 28 months in order to grow to 6,500 at 6.75% simple interest? 9. Two thousand is invested at 6% simple interest. How long would it take to have 3,000 in the account? 10. How long would 1,000 be invested at 5% simple interest to have an accumulated amount of 1,250? What is the principal invested at 11.5% simple interest on Oct 4, Y that will amount to 7,000 on Feb 15, Y + 1? EXERCISES 1.6 Answer problems 1 to 4 using the following set of obligations: 850 due now, 1,250 due in 1 years, 2,300 due in 2 years and 4,000 due in 5 years. 1. What single payment at year 3.5 at 5% simple interest will settle the set of obligations? 2. What single payment at year 2.5 at 5.5% simple interest will settle the set of obligations? 3. What single payment at year 2 at 6.5% simple interest will settle the set of obligations? 4. What single payment at year 4 at 7% simple interest will settle the set of obligations? What single payment made immediately will settle the following obligations, if the settlement rate is 5% simple interest: 3,500 due in 2 years; 4,200 due in 3 years; and 6,000 due in 5 years all with 6% simple interest? 5. 6. What single payment made immediately will settle the following obligations, if the settlement rate is 7% simple interest: 5,300 due in 1 year; 2,000 due in 2 years; and 4,000 due in 4 years all with interest at 8% simple interest? SIMPLE INTEREST 24 1.7 Simple Discount 7. Mr. Roberts borrowed 55,000 on Mar 1, 2012. He promised to settle the obligation with a payment of 10,000 on Mar 1, 2014, 25,000 on July 1, 2015, and the last payment on Nov 1, 2016. At 6% simple interest, how much will he have to pay to liquidate his obligation on Nov. 1, 2016? 8. Mrs. White borrowed 40,000 on June 1, 2012. She promised to settle the obligation with a payment of 9,000 on Oct 1, 2014, 12,000 on Feb 1, 2015, and the last payment on June 1, 2016. At 5% simple interest, how much will she have to pay to liquidate her obligation on June 1, 2016? 9. If money is worth 5%, what equal payments at the end of 4 and 6 years will equitably settle the following obligations: 500 due now, 1,500 due in 2 years at 6%, 4,000 due in 3 years at 6.5% and 4,500 due in 8 years at 3.5%? All interest rates are simple. 10. If money is worth 6.5%, what equal payments at the end of 3 and 5 years will equitably settle the following obligations: 1,500 due now, 700 due in 2 years at 6%, 1,750 due in 4 years at 5.5% and 2,500 due in 7 years at 4%? All interest rates are simple.