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| 1 | |
Maturity value equals principal plus interest. |
| | A) | True |
| | B) | False |
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| 2 | |
15 months is the same as 1.25 years. |
| | A) | True |
| | B) | False |
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| 3 | |
June 5 to February 10 is 115 days. |
| | A) | True |
| | B) | False |
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| 4 | |
The U.S. Rule allows the borrower to receive proper interest credits from partial payments. |
| | A) | True |
| | B) | False |
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| 5 | |
The rate of interest can be calculated by interest divided by the principal times time. |
| | A) | True |
| | B) | False |
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| 6 | |
The Federal Reserve banks use the exact interest method. |
| | A) | True |
| | B) | False |
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| 7 | |
Ordinary interest is based on: |
| | A) | 365 days |
| | B) | 360 days |
| | C) | 20 days in a month |
| | D) | A calendar year |
| | E) | None of the above |
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| 8 | |
When time is calculated by the exact number of days divided by 365 this is 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 $2,900 at 7 percent for 60 days (use ordinary interest) is: |
| | A) | $33.83 |
| | B) | $38.33 |
| | C) | $33.37 |
| | D) | $37.33 |
| | E) | None of the above |
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| 10 | |
The last interest calculated in the U.S. Rule would be: |
| | A) | Subtracted from the last payment |
| | B) | Only added to the original beginning balance |
| | C) | Added to the last adjusted balance |
| | D) | Ignored from the calculation |
| | E) | None of the above |
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| 11 | |
The number of days between September 4 and February 8 is: |
| | A) | 208 |
| | B) | 118 |
| | C) | 157 |
| | D) | 247 |
| | E) | None of the above |
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| 12 | |
Judy Clark went to the Reel Bank. She borrowed $7,800 at a rate of 6 ½ %. The date of the loan was September 2. Judy hoped to repay the loan on January 20. Assuming the loan is based on ordinary interest, Judy will pay back on January 20: |
| | A) | $7,979.71 |
| | B) | $7,997.17 |
| | C) | $197.17 |
| | D) | $179.71 |
| | E) | None of the above |
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| 13 | |
Logan Chivery owns her own car. Her June monthly interest was $300. The rate is 8 ½ percent. Logan's principal balance at the beginning of June is: (Use 360 days - do not round the denominator.) |
| | A) | $42,353.14 |
| | B) | $42,335.14 |
| | C) | $2,335.14 |
| | D) | None of the above |
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| 14 | |
Rusty took out a loan of $30,000 at 8% on March 19, 2006, which is due on January 18, 2007. Using exact interest, the amount of Rusty's interest cost is: |
| | A) | $2005.55 |
| | B) | $4,000.00 |
| | C) | $2005.48 |
| | D) | d. $32,005.48 |
| | E) | None of the above |
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| 15 | |
Lane Hall borrowed $11,000 on a 120-day 7 percent note. Lane paid $3,000 toward the note on day 50. On day 105 he paid an additional $2,000. Using the U.S. Rule, his adjusted balance after the 1st payment is: |
| | A) | $2,893.06 |
| | B) | $8,106.94 |
| | C) | $11,000.00 |
| | D) | $8,000.06 |
| | E) | None of the above |
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