1. A man borrows 6000. A payment of 100 is made 100 days later. A second payment of 4000 is paid 200 days after the first payment. A third payment of X is due 50 days after the second payment, after which the loan balance is 0. The loan is charged a simple interest rate of r = 10%.

What is X, if the Merchant's rule is used?

What is X, if the declining balance method is used?

2. John borrows 5000 from Brenda and writes a 90-day promissory note. The amount due back on the maturity date (legal due date) is 5137.50.

What was the interest rate on the loan?

After 30-days, the note is sold by Brenda to a bank that charges a simple discount rate of d = 10%. What are the proceeds of the sale?

3. You borrow money on May 15, 2007. You write promissory note to repay the loan in 9 months at a simple interest rate of r = 7%.

4. If the maturity value is 15,012.47, what is the face value of the note?

5. The note was sold 132 days prior to the maturity date to a bank. The bank pays 14,655.23 for the note. What rate of simple discount, d, did they use to determine this price?

6. A promissory note for 6000 is written on April 23, 2007. The due date is October 4, 2007. The simple interest rate on the note is r = 10.5%.

What is the maturity value of the note if ordinary interest (banker's rule) is used?

The note is sold after 80 days to a bank for 6142.29. What rate of return, r, is earned by the original owner (payee) of the note?

7. You invest 800 on May 25, 2007, on what day will you have earned exactly 31.96 of interest if your investment earns simple interest at r = 6%?

8. You invest 50,000 today. It earns simple interest at 15% for the first 5 months, 10% for the next 3 months and 12% for the last 2 months. What is the accumulated value at the end of 10 months?

9. You buy a stove for 1500 on February 20. The store gives you 4 months "interest free", after which you must pay the 1500. However, the store charges an administration fee of 50, to be paid today. What rate of simple interest, r, are you being charged for this "interest free" plan?

10. You invest 2300 on June 10. On November 10, you have earned 72.42 of interest. What rate of simple interest did you earn?