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

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

This is a quiz to test students' knowledge of simple interest.


Questions and Answers
  • 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.

    Correct Answer
    $45 interest will be earned.
    $45.00
    $45
    $44.38
    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.

    Correct Answer
    $6.30
    $6.21
    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.

    Correct Answer
    $8775
    $8775.00
    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.

    Correct Answer
    $1200
    $1200.00
    $1183.56
    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.

    Correct Answer
    $29.25
    29.25
    28.85
    $28.85
    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

    Correct Answer
    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

    Correct Answer
    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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  • Current Version
  • Mar 17, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Nov 10, 2008
    Quiz Created by
    Rmcgowan
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