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5.1 Example Problems: Interest. Interest

This document provides examples of simple interest, present value, and discount rate calculations: 1) It gives two examples of calculating simple interest for different principal amounts and time periods. 2) It provides the present value calculations for two examples with different future values, interest rates, and time periods. 3) It includes three examples involving discount rates, amounts, and time periods to calculate discounts and proceeds.

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Darwin
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17 views

5.1 Example Problems: Interest. Interest

This document provides examples of simple interest, present value, and discount rate calculations: 1) It gives two examples of calculating simple interest for different principal amounts and time periods. 2) It provides the present value calculations for two examples with different future values, interest rates, and time periods. 3) It includes three examples involving discount rates, amounts, and time periods to calculate discounts and proceeds.

Uploaded by

Darwin
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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5.

1 Example Problems

4. [5.1-5]. Find the simple interest. $3,724 at 8.4% for 11 months.

1. [5.1-4]. Find the simple interest. $1,974 at 6.3% for 7 months.

5. [5.1-17] Find the present value of $48,000 in 9 months at 5%


2. [5.1-16] Find the present value of $15,000 in 8 months at 6%

interest.

interest.

The present value is $14423.08

The present value is $46265.06

6. [5.1-21]. Find the proceeds. $9,450 ; discount rate 10%; length of


3. [5.1-20]. Find the amount of the discount and the proceeds. $7,150;

loan 7 months.

discount rate 12%; length of loan 11 months.

Discount =

Proceeds=

The proceeds is $8,898.75.

7. [5.1-25] Find the interest rate to the nearest tenth on the proceeds

for the following simple discount notes.


$6,200; Discount rate 10%: length of loan 8 months.

Discount =

Proceeds=
Solution:

The actual interest rate is approximately 10.7%

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