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| 1 | |
The time of a loan could be expressed in months, years, or days. |
| | A) | True |
| | B) | False |
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| 2 | |
18 months is the same as 1.5 years. |
| | A) | True |
| | B) | False |
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| 3 | |
July 10 to March 15 is 119 days. |
| | A) | True |
| | B) | False |
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| 4 | |
The U.S. Rule is seldom used in today's workplace. |
| | A) | True |
| | B) | False |
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| 5 | |
The U.S. Rule is a method that allows the borrower to receive proper interest credit when a debt is paid off in more than one payment before the maturity date. |
| | A) | True |
| | B) | False |
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| 6 | |
Interest is the cost of borrowing. |
| | A) | True |
| | B) | False |
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| 7 | |
Amount charged for use of bank's money is called: |
| | A) | Principal |
| | B) | Interest |
| | C) | Rate |
| | D) | Time |
| | E) | None of the above |
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| 8 | |
Federal Reserve Banks as well as the Federal government like to calculate simple interest based on: |
| | A) | Exact time, ordinary interest |
| | B) | Using 30 days in each month |
| | C) | Using 31 days in each month |
| | D) | Exact time, exact interest |
| | E) | None of the above |
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| 9 | |
Interest on $5,255 at 12 percent for 30 days (use ordinary interest) is: |
| | A) | $52.55 |
| | B) | $55.25 |
| | C) | $5.26 |
| | D) | $5.25 |
| | E) | None of the above |
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| 10 | |
The U.S. Rule: |
| | A) | Is only used by banks |
| | B) | Is never used by banks |
| | C) | Allows borrowers to receive interest credit |
| | D) | Is hardly used today |
| | E) | None of the above |
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| 11 | |
The number of days between Aug. 9 and Jan. 3 is: |
| | A) | 145 |
| | B) | 144 |
| | C) | 147 |
| | D) | 148 |
| | E) | None of the above |
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| 12 | |
Jill Ase went to the Sunshine Bank. She borrowed $6,500 at a rate of 12 3/4 percent. The date of the loan was September 5. Jill hoped to repay the loan off January 15. Assuming the loan is based on ordinary interest, Jill will pay back on January 15: |
| | A) | $303.887 |
| | B) | $6,803.88 |
| | C) | $299.71 |
| | D) | $6,799.71 |
| | E) | None of the above |
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| 13 | |
Maggie Jay owns her own car. Her June monthly interest was $250. The rate is 13 1/2 percent. Jay's principal balance at the beginning of June is: (Use 360 days) |
| | A) | $22,222.22 |
| | B) | $2,222.22 |
| | C) | $21,505.38 |
| | D) | $2,505.38 |
| | E) | None of the above |
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| 14 | |
Mel took out a loan of $40,000 at 14 percent of March 16, 2003 which is due on January 15, 2004. Using exact interest the amount of Mel's interest cost is: |
| | A) | $44,679.45 |
| | B) | $4,744.44 |
| | C) | $4,679.45 |
| | D) | $44,744.44 |
| | E) | None of the above |
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| 15 | |
Roger Rong borrowed $12,000 on 120 - day 11 percent note. Roger paid $4,000 toward the note on day 40. On day 110 he paid an additional $3,000. Using the U.S. Rule his adjusted balance after the 1st payment is: |
| | A) | $3,853.33 |
| | B) | $8,146.67 |
| | C) | $12,000.00 |
| | D) | $8,000.00 |
| | E) | None of the above |
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