602 CHAPTER 10 Consumer Mathematics Exercises $ All Exercises in this Section are related to financial literacy. Warm Up Exercises In Exercises 1– 8, fill in the blanks with an appropriate word, phrase, or symbol(s). 1. The money a bank or other lending institution is willing to lend you is called the amount of credit extended or the _______ of the loan. Principal 2. Anything of value pledged by the borrower that the lender may sell or keep if the borrower does not repay the loan is called the _______ or collateral. Security 3. The money the borrower pays for the use of the lender’s money is called the _______. Interest 4. When using the simple interest formula, the interest rate, r, is expressed as a(n) _______ number. Decimal 5. When using the simple interest formula, time, t, is expressed in the same period as the _______. Rate 6. A payment that is less than the full amount owed and made prior to the due date is known as a(n) _______ payment. Partial 7. If a partial payment is made on a loan, interest is computed on the principal from the first day of the loan until the date of the partial payment. This is known as the _______ rule. United States 8. The Banker’s rule considers a year to have _______ days. 360 Practice the Skills In Exercises 9 –18, determine the simple interest. Unless noted otherwise, assume the rate is an annual rate. Assume 360 days in a year. Round answers to the nearest cent. 9. p r t $375, 2.25%, 4 years = = = $33.75 10. p r t $620, 3.05%, 1.5 years = = = $28.37 11. p r t $1100, 8.75%, 90 days = = = $24.06 12. p r t $6742.75, 6.05%, 90 days = = = $101.98 13. p r t $587, 0.045% per day, 2 months = = = $15.85 14. p r t $2500, 3 %, 9 months 7 8 = = = $72.66 15. p r t $550.31, 8.9%, 67 days = = = $9.12 16. p r t $2756.78, 10.15%, 103 days = = = $80.06 17. p r t $1372.11, 1 % per month, 6 months 3 8 = = = $113.20 18. p r t $41,864, 0.0375% per day, 60 days = = = $941.94 In Exercises 19–24, use the simple interest formula to determine the missing value. If necessary, round all dollar figures to the nearest cent. 19. p r t i $2000, ?, 3 years, $82.80 = = = = 1.38% 20. p r t i ?, 2.1%, 135 days $37.80 = = = = $4800 21. p r t i ?, 6%, 5 months, $175.00 = = = = $7000 22. p r t i $800.00, 4%, ?, $64.00 = = = = 2 years 23. p r t i $957.62, 6.5%, ?, $124.49 = = = = 2 years 24. p r t i $1650.00, ?, 6.5 years, $343.20 = = = = 3.2% Problem Solving In Exercises 25–34, if necessary round all dollar figures to the nearest cent and round percents to the nearest hundredth of a percent. 25. Bank Personal Note Sidra borrowed $3500 from a bank for 6 months. Her friend was cosigner of Sidra’s personal note. The bank collected 7 %1 2 simple interest on the maturity date. a) How much did Sidra pay for the use of the money? $131.25 b) Determine the amount she repaid to the bank on the due date of the note. $3631.25 26. Personal Note Janice owns a hair salon and needs $20,000 to renovate her salon. She borrows the money on a 30-month personal bank note. The simple interest rate charged is 5.75%. a) How much interest does Janice pay? $2875 b) Determine the amount Janice must repay the bank on the due date of the note. $22,875 27. Bicycle Loan Gaetano lends his friend Ishmael $350 to buy a new bicycle. Fifteen months later, Ishmael repaid the $350 plus $17.50 interest. What annual rate of simple interest did Ishmael pay to Gaetano? 4% 28. Lawn Mower Loan Jevon runs a landscaping business and borrows $700 from his dad to buy a new lawn mower. Nine months later, Jevon repaid the $700 plus $10.50 interest. What annual rate of simple interest did Jevon pay to his dad? 2% SECTION 10.2 Zoriana Zaitseva/Shutterstock
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