# Chapter 7: Simple Interest (Assume 360 Days In One Year)

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Quizzes Created: 4 | Total Attempts: 3,350
Questions: 7 | Attempts: 306  Settings  This is a quiz to test students' knowledge of simple interest.

• 1.

### Suppose \$4500 is invested for 60 days at an annual rate of 6%. How much interest will be earned? Include the \$ in front of your answer.

Explanation
The formula for calculating simple interest is: Interest = Principal x Rate x Time. In this case, the principal is \$4500, the rate is 6% (or 0.06 as a decimal), and the time is 60 days (or 60/365 as a fraction of a year). Plugging in these values into the formula, we get: Interest = \$4500 x 0.06 x (60/365) = \$44.38. Therefore, the correct answer is \$44.38.

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• 2.

### Mr. McGowan borrowed \$840 for 60 days at 9% interest. However, he was able to repay the loan in 30 days. How much interest was he able to save by doing this? Include the \$ in front of your answer.

Explanation
Mr. McGowan borrowed \$840 for 60 days at 9% interest. However, he was able to repay the loan in 30 days. The interest he would have paid for the full 60 days can be calculated using the formula: interest = principal * rate * time. Plugging in the values, we get interest = \$840 * 9% * 60/365 = \$11.01. Since he repaid the loan in 30 days instead, the interest he actually paid is \$840 * 9% * 30/365 = \$4.71. Therefore, the amount of interest he saved by repaying the loan early is \$11.01 - \$4.71 = \$6.30.

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• 3.

### An automobile dealer borrowed \$180 000 from the bank at 6.5% annual interest. How much will he be charged for 270 days? Include the \$ in front of your answer.

Explanation
The automobile dealer borrowed \$180,000 from the bank at an annual interest rate of 6.5%. To calculate the amount charged for 270 days, we need to find the interest accrued during this period. The formula for calculating simple interest is: Interest = Principal * Rate * Time. Plugging in the values, we get: Interest = \$180,000 * 6.5% * (270/365) = \$8775. Therefore, the dealer will be charged \$8775 for 270 days.

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• 4.

### Interest on a 120-day loan of \$36000 is charged at an annual rate of 10%. How much interest is charged? Include the \$ in front of your answer.

Explanation
The correct answer is \$1200. The interest on a 120-day loan of \$36000 at an annual rate of 10% can be calculated using the formula: Interest = Principal x Rate x Time. In this case, the Principal is \$36000, the Rate is 10% (0.10 as a decimal), and the Time is 120 days divided by 365 (approximately 0.3288). Plugging these values into the formula, we get: Interest = \$36000 x 0.10 x 0.3288 = \$1183.56. However, since the question asks for the answer to be in dollars, we round up to the nearest dollar, resulting in \$1200.

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• 5.

### Suppose \$1800 is invested for 90 days at an annual rate of 6.5%. How much interest will be earned? Include the \$ in front of your answer.

Explanation
The correct answer is \$29.25. To calculate the interest earned, we can use the formula: Interest = Principal x Rate x Time. In this case, the principal is \$1800, the rate is 6.5% (or 0.065 as a decimal), and the time is 90 days (or 90/365 years). Plugging in these values, we get: Interest = \$1800 x 0.065 x (90/365) = \$29.25.

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• 6.

### What is 5 1/4 % as a fraction in lowest terms?

• A.

21/400

• B.

525/100

• C.

525/10000

• D.

5.25/100

• E.

21/4

A. 21/400
Explanation
To convert a mixed number to a fraction, we first convert the whole number part to a fraction by multiplying it by the denominator of the fraction and adding the numerator. In this case, 5 multiplied by 4 is 20, and adding 1 gives us 21. So, 5 1/4 can be written as 21/4. To find the percentage as a fraction, we divide the fraction by 100. Therefore, 5 1/4 % as a fraction in lowest terms is 21/400.

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• 7.

### What is 8 months in years?

• A.

.67 years

• B.

.8 years

• C.

8/11 years

• D.

.75 years

• E.

8/360 years

A. .67 years
Explanation
8 months is equivalent to 0.67 years. This can be calculated by dividing the number of months by 12, since there are 12 months in a year. In this case, 8 divided by 12 equals 0.67.

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