# Quiz 10: Simple Interest

Business

Free

True False

False

Free

True False

True

Free

True False

True

Free

True False

Free

True False

Free

True False

Free

True False

Free

True False

Free

True False

Free

True False

Free

True False

Free

True False

Free

True False

Free

True False

Q 15Q 15

The U.S. Rule is a method that allows the borrower to receive proper interest credit when a debt is paid off in more than one payment before the maturity date.

Free

True False

Free

True False

Q 17Q 17

In the U.S. Rule, the partial payment first covers the interest and the remainder reduces the principal.

Free

True False

Free

True False

Free

True False

Q 20Q 20

In calculating interest in the U.S. Rule from the last partial payment, the interest is subtracted from the adjusted balance.

Free

True False

Q 21Q 21

Interest is equal to:
A)Principal × rate divided by time
B)Principal divided by rate × time
C)Principal × time
D)Principal × rate × time
E)None of these

Free

Multiple Choice

Q 22Q 22

The amount charged for the use of a bank's money is called:
A)Principal
B)Interest
C)Rate
D)Time
E)None of these

Free

Multiple Choice

Q 23Q 23

Simple interest usually represents a loan of:
A)One month or less
B)One year or less
C)Two years or less
D)Six months or less
E)None of these

Free

Multiple Choice

Q 24Q 24

Federal Reserve banks as well as the federal government like to calculate simple interest based on:
A)Exact interest, ordinary interest
B)Using 30 days in each month
C)Using 31 days in each month
D)Exact interest
E)None of these

Free

Multiple Choice

Q 25Q 25

A note dated August 18 and due on March 9 runs for exactly:
A)230 days
B)227 days
C)272 days
D)203 days
E)None of these

Free

Multiple Choice

Q 26Q 26

A $40,000 loan at 4% dated June 10 is due to be paid on October 11. The amount of interest is (assume ordinary interest):
A)$503.00
B)$2,500.00
C)$546.67
D)$105.33
E)None of these

Free

Multiple Choice

Q 27Q 27

Interest on $5,255 at 12% for 30 days (use ordinary interest) is:
A)$52.55
B)$55.25
C)$5.26
D)$5.25
E)None of these

Free

Multiple Choice

Q 28Q 28

Given interest of $11,900 at 6% for 50 days (ordinary interest), one can calculate the principal as:
A)$1,428,005.70
B)$4,128,005.70
C)$1,428,000.00
D)$1,420.70
E)None of these

Free

Multiple Choice

Q 29Q 29

Interest of $1,632 with principal of $16,000 for 306 days (ordinary interest) results in a rate of:
A)10%
B)12%
C)12 1/2%
D)13%
E)None of these

Free

Multiple Choice

Q 30Q 30

Which of the following is not true of the U.S. Rule?
A)Calculate interest on principal from date of loan to date of first payment
B)Allows borrower to receive proper interest credits
C)Can use 360 days in its calculations
D)Can involve more than one payment before maturity date
E)None of these

Free

Multiple Choice

Q 31Q 31

The U.S. Rule:
A)Is used only by banks
B)Is never used by banks
C)Allows borrowers to receive interest credit
D)Is hardly used today
E)None of these

Free

Multiple Choice

Q 32Q 32

At maturity, using the U.S. Rule, the interest calculated from the last partial payment is:
A)Subtracted from adjusted balance
B)Added to beginning balance
C)Subtracted from beginning balance
D)Added to adjusted balance
E)None of these

Free

Multiple Choice

Free

Multiple Choice

Q 34Q 34

Jill Ley took out a loan for $60,000 to pay for her child's education. The loan would be repaid at the end of eight years in one payment with interest of 6%. The total amount Jill has to pay back at the end of the loan is:
A)$88,008
B)$80,800
C)$88,800
D)$28,800
E)None of these

Free

Multiple Choice

Q 35Q 35

A note dated Dec. 13 and due July 5 runs for exactly:
A)11 days
B)161 days
C)204 days
D)347 days
E)None of these

Free

Multiple Choice

Q 36Q 36

Janet Home went to Citizen Bank. She borrowed $7,000 at a rate of 8%. The date of the loan was September 20. Janet hoped to repay the loan on January 20. Assuming the loan is based on ordinary interest, Janet will pay back how much interest on January 20?
A)$188.22
B)$187.18
C)$189.78
D)$187.17
E)None of these

Free

Multiple Choice

Q 37Q 37

Joan Roe borrowed $85,000 at a rate of 11 3/4%. The date of the loan was July 8. Joan is to repay the loan on Sept. 14. Assuming the loan is based on exact interest, the interest Joan will pay on Sept. 14 is:
A)$86,860.68
B)$1,860.68
C)$1,886.53
D)$86,886.53
E)None of these

Free

Multiple Choice

Q 38Q 38

Joe Flynn visits his local bank to see how long it will take for $1,200 to amount to $2,100 at a simple interest rate of 7%. The time is (round time in years to nearest tenth):
A)9.2 years
B)11.1 years
C)10.7 years
D)17.1 years
E)None of these

Free

Multiple Choice

Q 39Q 39

Matty Kaminsky owns a new Volvo. His June monthly interest is $400. The rate is 8 ½%. Matty's principal balance at the beginning of June is (use 360 days):
A)$65,740.58
B)$64,470.58
C)$65,704.58
D)$56,470.58
E)None of these

Free

Multiple Choice

Q 40Q 40

Joyce took out a loan for $21,900 at 12% on March 18, 2013, which will be due on January 9, 2014. Using ordinary interest, Joyce will pay back on Jan. 9 a total amount of:
A)$2,167.10
B)$24,068.10
C)$24,038.40
D)$2,138.40
E)None of these

Free

Multiple Choice

Q 41Q 41

Janet took out a loan of $50,000 from Bank of America at 8% on March 19, 2012, which is due on July 8, 2012. Using exact interest, the amount of Janet's interest cost is:
A)$5,018.44
B)$2,561.44
C)$5,261.44
D)$5,216.44
E)None of these

Free

Multiple Choice

Q 42Q 42

Jim Murphy borrowed $30,000 on a 120-day 14% note. Jim paid $5,000 toward the note on day 95. On day 105 he paid an additional $6,000. Using the U.S. Rule, Jim's adjusted balance after the first payment is:
A)$25,000
B)$28,891.67
C)$1,108.33
D)$26,108.33
E)None of these

Free

Multiple Choice

Q 43Q 43

Christina Hercher borrowed $50,000 on a 90-day 8% note. Christina paid $3,000 toward the note on day 40. On day 60 she paid an additional $4,000. Using the U.S. Rule, Christina's adjusted balance after the first payment is:
A)$1,008.89
B)$48,008.89
C)$47,444.44
D)$44,744.44
E)None of these

Free

Multiple Choice

Q 44Q 44

Sandra Gloy borrowed $5,000 on a 120-day 5% note. Sandra paid $500 toward the note on day 40. On day 90 she paid an additional $500. Using the U.S. Rule, her adjusted balance after the first payment is:
A)$4,527.87
B)$4,725.87
C)$4,725.70
D)$4,527.78
E)None of these

Free

Multiple Choice

Q 45Q 45

Banks and other financial institutions sometimes calculate simple interest based on:
A)Exact interest method
B)Using 30 days for each month
C)Using 366 days in the year
D)Bankers rule, ordinary interest
E)None of these

Free

Multiple Choice

Q 46Q 46

With interest of $1,832.00 and a principal of $16,000 for 206 days, using the ordinary interest method, the rate is:
A)20%
B)12%
C)2%
D)10%
E)None of these

Free

Multiple Choice

Q 47Q 47

The number of days between May 20 and November 22 is:
A)197
B)206
C)186
D)183
E)None of these

Free

Multiple Choice

Q 48Q 48

Sue Gastineau borrowed $17,000 from Regions Bank at a rate of 5.5% to open her lingerie shop. The date of the loan was March 5. Sue hoped to repay the loan on September 19. Assuming the loan is based on ordinary interest, Sue will pay back how much in interest expense?
A)$467.50
B)$541.25
C)$514.25
D)$506.46
E)None of these

Free

Multiple Choice

Q 49Q 49

On May 17, Jane took out a loan for $33,000 at 6% to open her law practice office. The loan will mature the following year on January 16. Using the ordinary interest method, what is the maturity value due on January 16?
A)$34,342
B)$34,320
C)$34,323.62
D)$34,254
E)None of these

Free

Multiple Choice