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

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Questions: 7 | Attempts: 313 | Updated: Mar 17, 2023

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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.

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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4
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

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

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.

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.

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.

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.

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.

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

What is 8 months in years?