Section 1 Exercise. Provide a short solution as shown by the solved problem in item 1.

Find simple interest and maturity value to the nearest cent.

Interest Maturity Value
1. P 3800 at 11%, for 6 months P 4009 P 209 P 4009
I= PRT= P 3800*0.11*6/12=P 209
M=P+I=P 3800+209=P 4009

2. P 10,200 at 9.5%, for 10 months _____________ ______________

3. P 5500 at 8%, for 1 year _____________ ______________

4. P 18,500 at 7.5%, for 1 ¼ years _____________ ______________

Find the actual and approximate number of days from the first date to the second
1. February 15 to April 24 _____________ ______________

2. May 22 to August 30 _____________ ______________

3. December 1 to March 10 of the following year _____________ ______________

4. October 12 to February 22 of the following year _____________ ______________

Find (a) the exact interest and (b) the ordinary interest for each of the following to the nearest
cent. Then find (c) the difference of the two methods

1. P 185,000 at 7.5% for 180 days a. ___________________

b. ___________________
c. ___________________

2. P 29,500 for 11.25% for 120 days a. ___________________

b. ___________________
c. ___________________

3. P 52,610 at 8 ½ %, for 82 days a. ___________________

b. ___________________

c. ___________________

4. P 52,000 at 8 ¾ % for 200 days a. ___________________

b. ___________________
c. ___________________
 Find the date due, the amount of interest (use banker’s rule and rounded to the nearest cent if necessary), and
the maturity value

Date Loan Face Term of Date Loan Maturity Was

Made Value Loan Rate Is Due Value
1. Mar. 12 P 4800 220 days 9% __________ __________

2. Jan. 3 P 12,000 100 days 9.8% __________ __________

3. Nov. 10 P 6300 180 days 9¼% __________ __________

4. July 14 P 20,400 90 days 11 ¾ % __________ __________

Solve the following application problems. Round dollar amounts to the nearest cent.

1. Wells Fargo Bank borrows $ 25,000,000 at 4% for 90 days from a bank in Chicago Find (a)
the interest and (b) the maturity value
.
.

2. On October 15, IBM borrows $ 45,000,000 at 8% from a bank in San Francisco and agrees to
repay the loan in 120 days using ordinary interest. Find (a) the due date and (b) the
maturity value.

3. Joe Simpson’s property tax is $ 3416.05 and is due on April 15. He does not pay until July
23. The county adds a penalty of 9.3%simple interest on his unpaid tax. Find the penalty
using exact interest.
Section 2 Exercises. Provide a short solution as shown by the solved problem in item 1.
Find the principal in each of the following. Round to the nearest cent.
Rate Time (in days) Interest Principal
1. 10% 80 P 112 __________________

2. 6% 24 P 62.40 __________________

3. 8½% 120 P 4420 __________________

4. 10.5% 140 P 87.20 __________________

5. 9.5% 120 P 186 __________________

Find the rate in each of the following. Round to the nearest tenth of a percent.
Principal Time Interest Rate
1. P 7600 200 days P 498.22 __________________

2. P 15,600 90 days P 312 __________________

3. P 42,800 60 days P 677.67 __________________

4. P 20,000 90 days P 625 __________________

5. P 8000 4 months P 200 __________________

Find the time in each of the following. In Exercises 1–3 round to the nearest day; in Exercises 4
and 5, round to the nearest month.

Principal Rate Interest Time

1. P 36,000 9%, P 585 ________________________

2. P 24,000 11% P 454.70 ________________________

3. P 20,000 8% P 1200 ________________________

4. P 3500, 10 ¼ % P 143.50 ________________________

5. P 8400 7 ¼% P 357 ________________________

In each of the following application problems, find principal to the nearest cent, rate to the
nearest tenth of a percent, or time to the nearest day.

1. Hoyt Axton earned P 244.80 interest in 9 months in a short-term savings account that
paid 3.2% per year. Use the simple interest formula to estimate the amount initially
invested.

2. Joan Gretz invested P 3600 in a mutual fund containing bonds. Find the rate if she earned
P 237.50 in interest in 250 days.

3. Hot Air Balloon Tours, Inc. must pay the bank P 23,515.27 in interest 300 days after
making a loan of P 328,120 to purchase hot air balloons. Find the rate.

4. James Smith lets an P 1800 mortgage payment go 70 days overdue and is charged a
penalty of P 59.50. Find the rate of interest that was charged as a penalty.

5. Jan Rice signed a promissory note for P 6400 at 11 ½ %, interest with interest charges of
P 425.24. Find the term of the note to the nearest day.
Section 3 Exercises:
Find the discount to the nearest cent, then find the proceeds
Face Discount Time Proceeds or
Value Rate (Days) Discount Loan Amount
1. P 7800 9% 120 __________________

2. P 15,000 10.25% 90 __________________

3. P 19,000 10% 180 __________________

4. P 12,500 11% 150 __________________

5. P 22,400 8¾% 75 __________________

Find the maturity date and the proceeds for the following. Round to the nearest cent

Face Discount Date Time Maturity Proceeds or

Value Rate Made (Days) Date Loan Amount

1. P 64,000 9.5% Mar. 22 90 ________ ____________

2. P 9500 12% Oct. 12 100 ___________ ____________

3. P 10,000 10 ¼ % July 12 150 ___________ ____________

4. P 24,000 10% Dec. 10 60 ___________ ____________

5. P 8000 10.5% Nov. 4 165 ___________ ____________

Solve each of the following application problems. Round rate to the nearest tenth of a percent,
time to the nearest day, and money to the nearest cent.

1. Jessica Hernandez was unable to collect funds owed her from a customer that declared bankruptcy. The
shortage of cash forced Hernandez to sign a P 12,200 note at a discount rate of 11% to pay her bills. She
was told the interest would be P 931.94. Find the length of the loan in days.

Answer: _____________________
2. Wyatt Construction borrowed P 157.25 million during the construction phase of adding a wing to a casino
in Las Vegas. Management signed a 270-day note with a face value of P 170 million. Find the discount
rate.

Answer: _____________________
3. A regional manager at Trugreen, Inc. authorizes the borrowing of P 98,300 for trucks and sprayers needed
to spray yards with fertilizers and pesticides. The simple discount note has a 9.25% rate and matures in 150
days. Find the face value of the loan needed.

Answer: _____________________
4. As a borrower, would you prefer a simple interest note with a rate of 11% or a simple discount note at a rate
of 11%? Explain using an example.

Section 4 Exercises:
Find the maturity value of each of the following simple interest notes. Each note is then discounted
at 12%. Find the discount period, the discount, and the proceeds after discounting.
Date Loan Face Length Maturity Date of Discount
Was Made Value of Loan Rate Value Discount Period Discount Proceeds

1. Feb. 7 P 6200 90 days 10.5% __________ Apr. 1 _____ ________ _________

2. June 15 P 9200 140 days 12% __________ Oct. 22 _____ _______ _________

3. July 10 P 2000 72 days 11% __________ Aug. 2 _____ ______ _________

4. May 29 P 5500 80 days 10% __________ July 8 _____ ________ ___________

Solve the following application problems. Round interest and discount to the nearest cent.

1. First Bank loaned P 360,000 for 180 days to a company purchasing a rock-crushing machine. The bank
sold the 7% simple interest note 120 days later at an 8, discount rate. Find (a) the bank discount and (b) the
proceeds.
 Answer: _____________________

2. Cook and Daughters Farm Equipment accepts a P 5800 simple interest note at 12% for 100 days, for a small
used tractor. The note is dated May 12. On June 17, the firm discounts the note at the bank, at a 13%
discount rate. Find (a) the bank discount and (b) the proceeds.

Answer: _____________________

3. Hanson’s Jewelry signed a 180-day simple discount note with a face value of P 250,000 and a rate of 9 %on
March 19. The lender sells the note at an 8% discount rate on June 14. Find (a) the proceeds of the original
note, (b) the discount period, (c) the discount and (d) the proceeds at the sale of the note on June 14.

Answer: _____________________

4. A National Tire and Battery outlet borrowed P 48,500 on a 200-day simple interest note to expand the
battery store. The note was signed on December 28 and carried an interest rate of 9.8%. The note was then
sold on March 17 at a discount rate of 10%. Find (a) the maturity value of the note and (b) the proceeds to
the seller of the note on May 17.