1 Susan will receive $543.60 on June 30.

How much can he borrow at 9% on May 1,

if he uses his receipts to repay the loan
D1.
S = $ 543.60
i = 9%
n = 2/12
D2.
P ?
D3.
P = S / (1 + in)
P = $543.60 / (1 + (9% x 2/12)
P = $ 536

2 At what interest rate will $360 yield $27 in 2.5 years?

D1.
P = $ 360
I = $ 27
n = 2.5 years
D2.
i ?
D3.
i = I/Pn
i = $27 / ($360 x 2.5)
i = 3%

3 What is the amount if $630 is borrowed for 120 days at 14%? use the ordinary method
D1.
P = $ 630
n = 120 days
i = 14%
D2.
Amount (S) ?
D3.
I = Pin
I = $630 x (120/360) x 14%
I = $ 29.40
S = P+I
S = $630 + $29.40
S = $ 659

4 Susi borrowed $500 on June 1 of this year and agreed to repay the principal plus 9% interest in
 four months. He wishes to pay the loan on July 1 by discounting it at simple interest of 8%. How
much should he pay according to discount?
STEP 1
D1.
P = $ 500
i = 9%
n = 4 months
D2.
S ?
D3.
S = P(1 + in)
S = $500 (1 + (9% x 4/12))
S = $ 515 (amount on October 1)

STEP 2
D1.
S = $ 515
i = 8%
n = 4-1= 3 months
D2.
P ?
D3.
P = S / (1 + in)
P = $515 / (1 + (8% x 3/12))
P = $ 505 (value on July 1)

The example may be diagramed as follows :

Step (1) Maturity value - Accumulate the principal at 9% for 4 months

$500

Month 0 1 2 3 4
Date of Date of Maturity
borrowing discount date

Step (2) Present value - Discount the

$ 505 $ 515
maturity value at 8% for 3 months

5 On April 10, Hilda Borrowed $1200 and agreed to pay the loan plus 5% simple interest
in 60 days. If the debt is settled on May 25 at 6% simple interest, how much should he pay?
STEP 1
D1.
P = $ 1,200
i = 5%
n = 60 days
D2.
S ?
D3.
S = P(1 + in)
S = $1,200 (1 + (5% x 60/360))
S = $ 1,210 (amount on June 9)

STEP 2
D1.
S = $ 1,210
i = 6%
n = 9-Jun - 25-May
= 15 days
D2.
P ?
D3.
P = S / (1 + in)
P = $ 1,210 / (1 + (6% x 15/360))
P = $ 1,207 ( value on May 25)

The example may be diagramed as follows :

Step (1) Maturity value - Accumulate the principal at 5% for 60 days

$1,200

Day April 10 April 25 May 9 May 24 June 9

Date of Date of Maturity
borrowing discount (25 May) date

Step (2) Present value - Discount the

$ 1,207 $ 1,210
maturity value at 6% for 15 days
% on May 1, 6 The fixed costs of factory are $5,000. He variable costs for producing
selling price of each unit is $125. How many units should the factory
costs will be exactly equal to revenues (the total selling price)?
D1.
FC =
VC =
Selling Price =
D2.
Unit (x) ?
D3.
BEP =

7 A Clothier sells a dozen sweaters for $450. If her operating expenses

and her net profit is 16% of the selling price, what is the cost of each
D1.
Revenue =
Operating Expenses =
=
Net Profit =
=
D2.
Cost of each sweater ?
D3.
Net Profit =
ordinary method $ 72.00 =
Cost =
Cost =
Cost of each sweater =
=

8 On June 1, a hardware store had merchandise worth $1,200 at cost. T

merchandise was $2,000. Later the store sold part of it for $850. Wha
remaining merchandise at cost?
D1.
Cost =
Selling Price =
Part of sell =
D2.
Value of remaining merchandise at cost ?
cipal plus 9% interest in D3.
mple interest of 8%. How Selling Price =
Part of sell =
Other part of sell =

Precentage of selling price =

=

Value of remaining merchandise at cost =

=
=

9 On an invoice for $650 with credit term of 5/10, 2/20, n/30, dated Ma
were made as follows: $285 cash on June 1; $260 cash in June 5. Fin
on the two payments
Answer
Invoice date
5/10
2/20
n/30
First payment on 01/06/2021
Second payment on 05/06/2021
Total two cash discount on the two payments

10 An invoice date April 6 states that selling orice for merchandise is $6

is $620.50, the freight charge is $12.60, and the item are 2/10, n/30. F
total payment bill is paid on April 12?
Answer
Terms 2/10,n/30
Invoice Date April 6
ths Freight $ 12.60
$515
Invoice ammount $ 620.50

4
Discount date =
Maturity
date =
Due date =
=
$ 515 Discount amount =
=
Net Purchase =
=
% simple interest Remittence (total payment) =
much should he pay? =
ays
$1,210

June 9
Maturity
date

$ 1,210
 variable costs for producing each unit are $75. The
many units should the factory produce so that the total
he total selling price)?

$ 5,000
$ 75
$ 125

R*X = V * X+ F
$ 125 X = $ 75 X + $ 5,000
$ 125 X - $ 75 X = $ 5,000
$ 50 X = $ 5,000
X = $ 100

0. If her operating expenses are 32% of the selling price

ice, what is the cost of each sweater?

$ 450
32% or 32% x $450
$ 144
16% or 16% x $450
$ 72

Revenue - Cost - Operating Expenses

$450 - Cost - $144
$450 - $72 - $144
$ 234
$234 / 12
$ 20

ndise worth $1,200 at cost. The selling price of the

sold part of it for $850. What is the value of

$ 1,200
$ 2,000
$ 850
 $ 2,000
$ 850 _
$ 1,150

Cost / Selling Price

60%

Other part of sell x Precentage of selling price

$1,150 x 60%
$ 690

of 5/10, 2/20, n/30, dated May 24, the partial payments

e 1; $260 cash in June 5. Find the total cash discount

03/06/2021
13/06/2021
23/06/2021
$ 285 $ 14.25
$ 260 $ 5.20 +
$ 19

g orice for merchandise is $620.50, the freight charge

and the item are 2/10, n/30. Find the total payment if the

2/10,n/30
April 6
$ 12.60
$ 620.50

April 6 + 10
16-Apr
April 6 + 30
6-May
Invoice amount x 2%
$ 12.41
Invoice amount - discount amount
$ 608.09
Net purchase + freight
$ 621