FDNBUSM Problem Solving $20,000 at what interest rate did he borrow the

money?
1. To buy a car, Jessica borrowed $15,000 for 3
years at an annual simple interest rate of 9%. 10. Joshua borrowed $1,000 from his friend and
How much interest will she pay if she pays the paid him back $1,050 in six months. What
entire loan off at the end of the third year? What simple annual interest did Joshua pay his friend?
is the total amount that she will repay?
11. The Hemmings borrowed $3,000 for home
2. Nancy invested $6,000 in a bond at a yearly improvements. They repaid the loan and $600 in
rate of 3%. She earned $450 in interest. How simple interest four years later. What simple
long was the money invested? annual interest rate did they pay?

3. John’s parents deposited $1,000 into a savings 12. Mr. Berry had $120,000 in a retirement
account as a college fund when he was born. account. The account paid 4.25% simple
How much will John have in this account after interest. How much money was in the account at
18 years at a yearly simple interest rate of 3.5%? the end of 10 years?

4. Mr Johnson borrowed $8,000 for 4 years to 13. To buy a house, Tom borrowed $50,000 for 5
make home improvements. If he repaid a total of years at an annual simple interest rate of 8%.
$10,320, at what interest rate did he borrow the How much interest will he pay if he pays off the
money? entire loan at the end of the fifth year?

5. A bank is offering 2.5% simple interest on a 14. Rob borrowed $2,500 for 18 months and
savings account. If you deposit $5,000, how repaid $2,950. What simple annual interest did
much interest will you earn in one year? he pay?

6. To buy a laptop computer, Elaine borrowed 15. Mary invested $750 in a savings account for
$2,000 for 3 years at an annual simple interest 2 years. The total interest earned on the
rate of 5%. How much interest will she pay if investment was $105. What was the interest rate
she pays the entire loan off at the end of the third on the account?
year? What is the total amount that she will
repay? 16. Rose invested $8,000 in a mutual fund at a
yearly rate of 9%. How much would she have in
7. Bertha deposited $1,000 into a retirement the account after 5 years?
account when she was 18. How much will
Bertha have in this account after 50 years at a 17. Hope Slater borrowed $40,000 for office
yearly simple interest rate of 7.5%? furniture. The loan was for 6 months at an
annual interest rate of 4%. What are Hope’s
8. TJ invested $4,000 in a bond at a yearly rate interest and maturity value?
of 2%. He earned $200 in interest. How long
was the money invested? 18. How much interest is charged when $10,000
is borrowed for 2 years at an interest rate of 3%?
9. Mr. Mogi borrowed $9,000 for 10 years to
make home improvements. If he repaid a total of
19. Isabella deposited $600 into a savings 28. Jackie Rotter took out a loan of $20,000 to
account at a local bank that earns 5% per year. be repaid at the end of 7 months in one payment
How much interest does she earn per year? with interest at 11.5%. How much was the
interest due? What is the total amount Jackie has
20. Susan lends Php 50,000 to Jane on October to pay back at the end of the loan?
1, 2010. She expects Jane to pay the principal
and simple interest at 9% to fully settle the debt 29. Jerry Stevens wants to know how long it will
on March 28, 2011. What amount does Susan take $1,000 to amount to $1,750 at a simple
receive? interest rate of 8.5%. Could you help Jerry?
Round time to the nearest tenth.
21. Find the principal which will amount to Php
3,006,000 in 3 years at 9.25% simple interest 30. On March 4, Joe Bench borrowed $50,000 at
rate. 5%. Interest and principal are due on July 6.
What is the interest cost and the maturity value?
22. Accumulate Php 85,000 for 20 months at a a) using exact interest; b) using ordinary interest.
simple interest rate of 12% (Note: To
accumulate an amount means to find its maturity 31. Tim Jarvis borrowed $820.21 from a bank.
value) Tim’s interest is $19.48 for 90 days. What rate
of interest did Tim pay using the ordinary
23. At what simple interest rate will Php interest method?
415,000 increase to Php 500,000 in 3 years?
32. Claire Russell is buying a car. Her
24. When will Php 42,000 increase to Php November monthly interest was $210 at 7 4 %
3

50,000 if the simple interest rate at which it is

interest. What is Claire’s principal balance (to
invested is 11.4%?
the nearest dollar) at the beginning of
November? Use 360 days. Do not round the
25. In what time will Php 5,000 double itself at
denominator in your calculation.
the rate of 9% simple interest?
33. Marcia Rodger borrowed $3,500 from Valley
26. Lorna Hall’s real estate tax of $2,010.88 was
Bank at a rate of 9.5%. The date of the loan was
due on December 14, 2024. Lorna lost her job
October 10. Marcia hoped to repay the loan by
and could not pay her tax bill until February 27,
1
February 10. Assume the loan is based on
2025. The penalty for late payment is 6 2 % ordinary interest. What will the interest cost be?
ordinary interest. How much will Marcia repay on February 10?
a. What is the penalty Lorna must pay? What would the payback be if exact interest was
b. What is the total amount Lorna must pay used?
on February 27?
34. Jeff Edsell owes $5,000 on a 4%, 90-day
27. Ann Hopkins borrowed $60,000 for her note. On day 50, Jeff pays $600 on the note. On
child’s education. She must repay the loan at the day 80, Jeff makes an $8000 additional payment.
end of 8 years in one payment with 5 2 %
1 Assume a 360-day year. What is Jeff’s adjusted
balance after day 50 and after day 80? What is
interest. What is the maturity value Ann must
the ending balance due?
repay?
35. Comet Lee borrowed $16,000 on a 6%, d. Effective rate (to the nearest tenth
90-day note. After 20 days, Comet paid $2,000 percent).
on the note. On day 50, Comet paid $4,000 on
the note. What are the total interest and ending 42. Pete Runnels has a choice of two different
balance due by the U.S. Rule? Use ordinary notes that both have a face value (principal) of
interest. $14,000 for 60 days. One note has a simple
interest rate of 8%, while the other note has a
36. James Co. borrowed $1,200 on a 90-day, simple discount rate of 8%. For each type of
11% note. After 15 days, James paid $200 note, calculate (a) interest owed, (b) maturity
toward the note. James made an additional value, (c) proceeds, and (d) effective rate.
payment of $150, 40 days later. What is the final
balance due and total interest for the U.S. Rule? 43. If you buy a $10,000, 13-week Treasury bill
Use ordinary interest. at 8&, how much will you pay, and what is the
effective rate?
37. Find the actual time between April 15 and
December 21 of the same year. 44. Averi Walker paid off a 150-day note at 6%
with a single payment, also known as a balloon
38. Find the approximate time between April 15 payment, of $2,550. Find the face value (P) and
and December 21 of the same year. interest (I) for the simple interest note.

39. Mr. Aguirre borrowed Php 10,000 on June 45. Mallori Rouse needs $3,000 to drywall her
25, 2019. If the maturity value is to be paid on master bedroom. Find the face value of a simple
November 18 of the same year at 15% interest, discount note that will provide her with $3,000
how much should he pay given each set of at 6.5% for 85 days.
conditions below?
a. Exact interest for the approximate time 46. How much interest will be deducted from a
b. Ordinary interest for the approximate loan worth Php 20,000 after 3 years with a
time discount rate of 6%? How much will the
c. Exact interest for the actual time proceeds of the loan be?
d. Ordinary interest for the actual time
47. Samson wants to borrow Php 12,000 payable
40. Mike French borrowed $9,000 at 9% for 85 in two years at 12% discount rate. How much
days. Calculate Mike’s proceeds from this will Samson receive on the origin date? How
simple discount note. Assume ordinary interest. much will he pay on the maturity date?
What is the effective rate of interest to the
nearest hundredth percent? 48. Determine the interest to be deducted in
advance if Php 7,500 is due after 3 years, with
41. The face value of both a simple interest and an interest rate of 8% per annum.
a simple discount note are $6,000. If both notes
have interest rates of 8% for 90 days, calculate: 49. Mr. Barria issued a simple interest note
a. Amount of interest charged for each worth Php 15,000 to Mr. Benedicto on October
type of note 12, 2018 which matures after two months with
b. Amount of each borrower would receive an interest rate of 15%. If Mr. Benedicto decides
c. Amount payee would receive at maturity to sell it to Gina on November 15, 2018, what
will be the proceeds of the note if Gina charges 58. Melvin Indecision has difficulty deciding
16% interest? whether to put his savings in Mystic Banks or
Four Rivers Bank. Mystic offers 10% interest
50. Mr. Bernal received a Php 150,000 bank compounded semiannually. Four Rivers offers
discount note for 6 months at 5% simple 8% interest compounded quarterly. Melvin has
discount. After 2 months, Mr. Bernal decides to $10,000 to invest. He expects to withdraw the
sell the note to the bank. How much proceeds money at the end of 4 years. Which bank gives
will Mr. Bernal get from the sale of this note? Melvin the better deal?

51. On July 14, Gracie Paul accepted a $60,000, 59. Lee Holmes deposited $15,000 in a new
6%, 160-day note from Mike Lang. On savings account at 9% interest compounded
November 12, Gracie discounted the note at semiannually. At the beginning of year 4, Lee
Lend Bank at 7%. What proceeds did Gracie deposits an additional $40,000 at 9% interest
receive? compounded semiannually. At the end of 6
years, what is the balance in Lee’s account?
52. The owner of Lease.com signed a $60,000
note at Albert Bank. Albert charges a 7 4 %
1 60. Paul Havlik promised his grandson Jamie
that he would give him $6,000 8 years from
discount rate. If the loan is for 210 days, find (a)
today for graduating from high school. Assume
the proceeds and (b) the effective rate charged
money is worth 6% interest compounded
by the bank (to the nearest tenth percent).
semiannually. What is the present value of this
$6,000?
53. Christy Smith wants to open a sports bar. If
she qualifies for a $250,225 simple discount
61. Lorna Ray, owner of a Starbucks franchise,
note at 9% for 280 days, what are her proceeds?
loaned $40,000 to Lee Reese to help him open a
new flower shop online. Lee plans to repay
54. How much would Nellie Viner need to take
Lorna at the end of 5 years with 4% interest
out if she needed $4,500 at 7% for 85/360 days
compounded semiannually. How much will
for a simple discount note?
Lorna receive at the end of 5 years?
55. Help Christy Hackett figure out the time on
62. Joe Beary wants to attend Riverside College.
her simple discount note: $3,750 at 5% paying
Eight years from today he will need $50,000. If
$100 in interest.
Joe’s bank pays 6% interest compounded
semiannually, what must Joe deposited today to
56. Bill Smith deposited $80 in a savings
have $50,000 in 8 years?
account for 4 years at an annual interest rate of
8%. What is Bill’s interest and compounded
63. Shelley Katz deposited $30,000 in a savings
amount?
account at 5% interest compounded
semiannually. At the beginning of Year 4, Shelly
57. Lynn Ally, owner of a local Subway shop,
deposits an additional $80,000 at 5% interest
loaned $40,000 to Pete Hall to help him open a
compounded semiannually. At the end of 6
Subway franchise. Pete plans to repay Lynn at
years, what is the balance in Shelley’s account?
the end of 8 years with 6% interest compounded
semiannually. How much will Lynn receive at
the end of 8 years?
64. Earl Miller, owner of a Papa Gino’s 71. Find the compound amount after 5 years and
franchise, wants to buy a new delivery truck in 6 9 months if the principal is Php 150,000 and the
years. He estimates the truck will cost $30,000. rate is 7% compounded annually.
If Earl invests $20,000 now at 5% interest
compounded semiannually, will Earl have 72. How much must Ella deposit in a bank that
enough money to buy his delivery truck at the pays 11% compounded quarterly so that she will
end of 6 years? have Php 400,000 after 4 years?

65. Minnie Rose deposited $16,000 in Street 73. A personal computer was bought on
Bank at 6% interest compounded quarterly. installments - Php 5,000 down payment and the
What was the effective rate (APY)? Round to balance of Php 22,000 in 2 years. What is the
the nearest hundredth percent. cash price if the interest rate is 20%
compounded quarterly?
66. Lou Cavalier, owner of Cavalier Lube,
estimates that he will need $70,000 for new 74. On April 15, 2011, Justin borrowed Php
equipment in 7 years. Lou decided to put aside 1.4M. He agreed to pay the principal and the
money today so it will be available in 7 years. interest at 8% compounded semiannually on
Reel Bank offers Lou 6% interest compounded July 15, 2016. How much will he pay then?
quarterly. How much must Lou invest to have
$70,000 in 7 years? 75. At what rate converted quarterly will Php
30,000 become Php 40,000 in 7 years?
67. Bernie Long wants to retire to California
when she is 60 years of age. Bernie is now 40. 1
76. If Php 80,000 is invested at the rate of 6 2 %
She believes that she will need $900,000 to
compounded annually, when will it earn interest
retire comfortably. To date, Bernie has set aside
of Php 15,000?
no retirement money. If Bernie gets 8%
compounded semiannually, how much must
Bernie invest today to meet her $900,000 goal?

68. You discover a savings account belonging to

3
your great-grandmother. It has been earning 1 4
% annually for 50 years. The balance is $35,712.
How much money did your great-grandmother
originally put in the account, to the nearest
dollar?

69. Find the compound amount at the end of 12

periods if the principal is Php 25,000 and the
interest per period is 10%

70. What is the maturity value of a Php 75,000,

three-year investment earning 5% compounded
monthly?