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This chapter covers principles of finance. After completing this chapter students should be able to: solve financial problems that involve simple interest; solve problems involving compound interest; find the future value of an annuity; find the amount of payments to a sinking fund; find the present value of an annuity; and find an installment payment on a loan.

Simple interest and discount

Do the following simple interest problems.

If an amount of $2,000 is borrowed at a simple interest rate of 10% for 3 years, how much is the interest?

$600

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You borrow $4,500 for six months at a simple interest rate of 8%. How much is the interest?

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John borrows $2400 for 3 years at 9% simple interest. How much will he owe at the end of 3 years?

$3048

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Jessica takes a loan of $800 for 4 months at 12% simple interest. How much does she owe at the end of the 4-month period?

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If an amount of $2,160, which includes a 10% simple interest for 2 years, is paid back, how much was borrowed 2 years earlier?

$1800

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Jamie just paid off a loan of $2,544, the principal and simple interest. If he took out the loan six months ago at 12% simple interest, what was the amount borrowed?

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Shanti charged $800 on her charge card and did not make a payment for six months. If there is a monthly charge of 1.5%, how much does she owe?

$872

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A credit card company charges 18% interest on the unpaid balance. If you owed $2000 three months ago and have been delinquent since, how much do you owe?

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An amount of $2000 is borrowed for 3 years. At the end of the three years, $2660 is paid back. What was the simple interest rate?

11%

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Nancy borrowed $1,800 and paid back $1,920, four months later. What was the simple interest rate?

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Jose agrees to pay $2,000 in one year at an interest rate of 12%. The bank subtracts the discount of 12% of $2,000, and gives the rest to Jose. Find the amount of the discount and the proceeds to Jose.

Discount $240, Proceeds $1760

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Tasha signs a note for a discounted loan agreeing to pay $1200 in 8 months at an 18% discount rate. Determine the amount of the discount and the proceeds to her.

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An amount of $8,000 is borrowed at a discount rate of 12%, find the proceeds if the length of the loan is 7 months.

$7440

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An amount of $4,000 is borrowed at a discount rate of 10%, find the proceeds if the length of the loan is 180 days.

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Derek needs $2400 new equipment for his shop. He can borrow this money at a discount rate of 14% for a year. Find the amount of the loan he should ask for so that his proceeds are $2400.

$2790.70

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Mary owes June $750, and wants to pay her off. She decides to borrow the amount from her bank at a discount rate of 16%. If she borrows the money for 10 months, find the amount of the loan she should ask for so that her proceeds are $750?

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Compound interest

Do the following compound interest problems involving a lump-sum amount.

If $8,000 is invested at 9.2% compounded monthly, what will the final amount be in 4 years?

$11542.52

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How much should be invested at 10.3% for it to amount to $10,000 in 6 years?

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Questions & Answers

what does preconceived mean
sammie Reply
physiological Psychology
Nwosu Reply
How can I develope my cognitive domain
Amanyire Reply
why is communication effective
Dakolo Reply
Communication is effective because it allows individuals to share ideas, thoughts, and information with others.
effective communication can lead to improved outcomes in various settings, including personal relationships, business environments, and educational settings. By communicating effectively, individuals can negotiate effectively, solve problems collaboratively, and work towards common goals.
it starts up serve and return practice/assessments.it helps find voice talking therapy also assessments through relaxed conversation.
miss
Every time someone flushes a toilet in the apartment building, the person begins to jumb back automatically after hearing the flush, before the water temperature changes. Identify the types of learning, if it is classical conditioning identify the NS, UCS, CS and CR. If it is operant conditioning, identify the type of consequence positive reinforcement, negative reinforcement or punishment
Wekolamo Reply
please i need answer
Wekolamo
because it helps many people around the world to understand how to interact with other people and understand them well, for example at work (job).
Manix Reply
Agreed 👍 There are many parts of our brains and behaviors, we really need to get to know. Blessings for everyone and happy Sunday!
ARC
A child is a member of community not society elucidate ?
JESSY Reply
Isn't practices worldwide, be it psychology, be it science. isn't much just a false belief of control over something the mind cannot truly comprehend?
Simon Reply
compare and contrast skinner's perspective on personality development on freud
namakula Reply
Skinner skipped the whole unconscious phenomenon and rather emphasized on classical conditioning
war
explain how nature and nurture affect the development and later the productivity of an individual.
Amesalu Reply
nature is an hereditary factor while nurture is an environmental factor which constitute an individual personality. so if an individual's parent has a deviant behavior and was also brought up in an deviant environment, observation of the behavior and the inborn trait we make the individual deviant.
Samuel
I am taking this course because I am hoping that I could somehow learn more about my chosen field of interest and due to the fact that being a PsyD really ignites my passion as an individual the more I hope to learn about developing and literally explore the complexity of my critical thinking skills
Zyryn Reply
good👍
Jonathan
and having a good philosophy of the world is like a sandwich and a peanut butter 👍
Jonathan
generally amnesi how long yrs memory loss
Kelu Reply
interpersonal relationships
Abdulfatai Reply
What would be the best educational aid(s) for gifted kids/savants?
Heidi Reply
treat them normal, if they want help then give them. that will make everyone happy
Saurabh
What are the treatment for autism?
Magret Reply
hello. autism is a umbrella term. autistic kids have different disorder overlapping. for example. a kid may show symptoms of ADHD and also learning disabilities. before treatment please make sure the kid doesn't have physical disabilities like hearing..vision..speech problem. sometimes these
Jharna
continue.. sometimes due to these physical problems..the diagnosis may be misdiagnosed. treatment for autism. well it depends on the severity. since autistic kids have problems in communicating and adopting to the environment.. it's best to expose the child in situations where the child
Jharna
child interact with other kids under doc supervision. play therapy. speech therapy. Engaging in different activities that activate most parts of the brain.. like drawing..painting. matching color board game. string and beads game. the more you interact with the child the more effective
Jharna
results you'll get.. please consult a therapist to know what suits best on your child. and last as a parent. I know sometimes it's overwhelming to guide a special kid. but trust the process and be strong and patient as a parent.
Jharna
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Source:  OpenStax, Applied finite mathematics. OpenStax CNX. Jul 16, 2011 Download for free at http://cnx.org/content/col10613/1.5
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