Supplemental Instruction Handouts
Business Math
Chapters 6 & 7:
Simple Interest
1.
How much interest will be earned on an investment of $4,500 if it is invested
at 4.8% for three months?
2.
If the interest paid on a loan was $350 at an interest rate of 0.3% per month
for 5 months, how much was the amount originally borrowed?
3.
What interest rate did an investment earn if we invested $15,000 for 9
months and received $420 in interest?
4.
Mark loaned OJ $500 at a simple interest rate of 3.4% p.a. If OJ paid Mark
$62.50 in interest, how long was the loan for?
5.
On May 1st, Aerika put $3,200 into a term deposit until September 2 nd, when
she will need the money for tuition and books. For term deposits that last
between 120 – 180 days her credit union will pay her 3.8%. How much
interest will she earn on her term deposit?
6.
What will be the maturity value in 16 months of a $2,300 loan at a simple
interest rate of 7.3%?
7.
How many days will it take $2,200 to grow to $2,854.35 at an annual rate of
6.84%?
8.
Sam has asked Ron if he could postpone payment of his debt to Ron for 120
days. If Ron charges Sam 5.25% interest on the debt of $650, how much will
Sam have to pay Ron in 120 days?
9.
What will be the maturity value of an investment of $25,000 in a 90 – day
term deposit paying an interest rate of 3.4%?
10.
If on the maturity date, from the last question, we decide to take the
maturity value, including the interest, and “rolled it over” into a 120 – day
term deposit paying an interest rate of 2.8%, what will be the maturity
value?
Learning Assistance Centre
www.rrc.mb.ca/lac
These questions are compiled by Mike Reimer for the Learning Assistance Centre.
11.
For 90 to 365 – day GICs, TD Canada Trust offered a rate of 3.10% on
investments of $25,000 to $59,999 and a rate of 3.40% on investments of
$60,000 to $99,999.How much more will you receive in interest on a single
$65,000 investment for 270 days as compared to making two investments of
$32,500 for 270 days?
12.
Calculate the price of a $20,000, 91 – day Province of Manitoba Treasury bill
on its issue date if the current market rate of return is 2.678%?
13.
Damien purchased a $50,000 182 – day T – bill discounted to yield 4.4%.
When he sold it 30 days later, yields had dropped to 4.1%. How much did
Damien earn?
14.
A $100,000, 90 – day commercial paper certificate issued by Noranda Inc.
was sold on its issue date for $99,250. What rate of return will it yield to the
buyer?
Learning Assistance Centre
www.rrc.mb.ca/lac
These questions are compiled by Mike Reimer for the Learning Assistance Centre.