Test 4 chapters 10 and 11

·         Question 1

	Jim Murphy borrowed $30,000 on 120-day fourteen percent note. Jim paid $5,000 toward the note on day 95. On day 105 he paid an additional $6,000. Using the U.S. Rule, Jim's adjusted balance after the first payment is:
	Answer: $26,108.33

·        Question 2

	Simple interest usually represents a loan of:
	Answer: 1 year or less

·         Question 3

	Given interest of $1,632 with principal of $16,000 for 306 days (ordinary interest), results in a rate of:
	Answer 12 percent

·         Question 4

	Jill Ley took out a loan to pay for her child's education for $60,000. The loan would be repaid at the end of 8 years in one payment with an interest of 6 percent. The total amount Jill has to pay back at the end of the loan is:
	Answer $88,800

·         Question 5

	The U.S. Rule:
	Answer Allows borrowers to receive interest credit.

·         Question 6

	At maturity, using the U.S. Rule the interest calculated from last partial payment is:
	Answer   Added to adjusted balance.

·         Question 7

	Joe Flynn visited his local bank to see how long it will take for $1,200 to amount to $2,100 at a simple interest rate of 7 percent. The time is: (Round time in years to nearest tenth)
	Answer 10.7 years ·         Question 8 Given interest of $11,900 at 6 percent for 50 days (ordinary interest), one can calculate the principal as:   Answer None of these ·         Question 9 Janet Home went to Citizen Bank. She borrowed $7,000 at a rate of 8 percent. The date of the loan was September 20. Janet hoped to repay the loan on January 20. Assuming the loan is based on ordinary interest, Janet will pay back interest on January 20:   Answer $189.78 ·         Question 10 Federal Reserve Banks as well as the Federal government like to calculate simple interest based on: Answer   Exact interest ·         Question 11 Interest on $5,255 at 12 percent for 30 days (use ordinary interest) is: Answer   $52.55 ·         Question 12 Christina Hercher borrowed $50,000 on a 90 day, eight percent note. Christina paid $3,000 toward the note on day 40. On day 60 she paid an additional $4,000. Using the U.S. Rule, Christina's adjusted balance after the first payment is: Answer   $47,444.44 ·         Question 13 A note dated August 18 and due on March 9 runs for exactly: Answer   203 days ·         Question 14 A $40,000 loan at 4 percent dated June 10 is due to be paid on October 11. The amount of interest is: (Assume ordinary interest)  Answer $546.67 ·         Question 15 Amount charged for use of bank's money is called: Answer Interest ·         Question 16 Interest is equal to: Answer  I=Prt Principal x rate x time ·         Question 17 Sandra Gloy borrowed $5,000 on a 120 day, 5 percent note. Sandra paid $500 toward the note on day 40. On day 90 she paid an additional $500. Using the U.S. Rule, her adjusted balance after the first payment is: Answer   $4,527.78 ·         Question 18 Joyce took out a loan for $21,900 at 12 percent on March 18, 2007, which will be due on January 9, 2008. Using ordinary interest, Joyce will pay back on Jan. 9 a total amount: Answer   $24,068.10 ·         Question 19 A note dated Dec. 13 and due July 5 runs for exactly Answer   204 ·         Question 20 Joan Roe borrowed $85,000 at a rate of 11 3/4 percent. The date of the loan was July 8. Joan is to repay the loan on Sept. 14. Assuming the loan is based on exact interest, the interest Joan will pay on Sept. 14 is: Answer   $1,860.68 ·         Question 21 If one discounts a non-interest-bearing note, all the following would be used except:  Answer Principal + Interest ·         Question 22 The maker of a promissory note: Answer   Issues the note ·         Question 23 Jill Jones borrowed $18,000 for 180 days from Sovereign Bank. The bank discounts the note at 8 percent. The effective interest rate to the nearest hundredth percent is: Answer 8.33 percent ·         Question 24 A $7,000, 4 percent, 120-day note, dated March 20, is discounted on July 15. Assuming a 3 percent discount rate, the bank discount is: Answer   $1.77 ·         Question 25 B.Blue discounts a 90-day note for $20,000 at 4 percent. The bank discount is: (Assume ordinary interest) Answer   $200