Interest & Credit

ASSIGNMENT BOOKLET

EMA 30S
NAME: _____________________
Interest & Credit Date: ________________

Page |1
 SIMPLE INTEREST ASSIGNMENT

* For full marks, show all work. (Formula, substitution) *

1) Given the following information, calculate the simple interest earned. 18

a) Principal = $6000, interest rate = 5%, time = 4 years.

I= P= R= T=

(2)

b) Principal = $500, interest rate = 3%, time = 2 years.

I= P= R= T=

(2)

2) Brandon invested $600 at 1.5 % for 3 years.

a) Calculate the simple interest earned on his investment.

I= P= R= T=

(2)

b) What is the total amount of money Brandon will have at the end of the
investment time period?

(1)

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 Interest & Credit Date: ________________

3) Etienne invested $600 at 5.2% over 6 years. How much interest did he earn?

(2)

4) When Jennifer invested $700 over 5 years, she earned $140 interest. What
interest rate was used year? (Express as a percent)

(3)

5) Heidi invested $800 at 6.2% and earned $161.20 interest. For how long did she
invest this money?

(3)

6) Dylan invested some of his hard earned money for 48 months at 4.8 % and
earned $384 interest. How much money did Dylan invest?

(3)

Page |3
 COMPOUND INTEREST ASSIGNMENT
nt
* For full marks, show all work.* r
Round answers to two decimal places. A P 1 25
n
1) a) 24 months = years b) 78 weeks = years

2) a) 600 days = years b) 50 months = years

(6)

3) a) 31 weeks = years b) 150 days = years

4) For each of the following compound periods, state how many times per year this occurs:

a) monthly: b) daily: c) weekly:

(3)
d) yearly: e) semi-monthly: f) bi-monthly:

5) If Chris invests $10 000 for 4 years at 3.2% per year compounded monthly, how much
money will Chris have after this 4 year period?

(4)

6) Which savings account would be better: One that compounds daily or one that
compounds monthly? Briefly explain.

(2)

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 Interest & Credit Date: ________________

7) Given P = $1400, r = 4.2%, n = 24, and t = 4 years, what will A be?

(4)

8) Given a principal amount of $4300, an interest rate of 3.6%, compounded semi-annually

over 5 years, what will the compounded amount be?

(4)

9) Lets say you began with a principal (P) of $5300, and after investing it over a period of
7 years at 2.3%, you ended up with $6200 (A). How much interest did you gain here?

(2)

BONUS: If you invested a certain amount of money over 6 years at 2.9%, compounded
weekly and ended up with a total amount of $6000. How much money did you have in the
beginning?

Page |5
 CREDIT CARD ASSIGNMENT

* For full marks, show all work.*

Round answers to two decimal places. 10
1) Dylan has a credit card with an annual interest rate charge of 22.2% and a monthly
limit of $10 000. He had a previous balance of $3800 and made purchases totaling
$1780. He made a payment of only $2100. His minimum monthly payment must be $80
or 9% whichever is greater. Determine:

a) The monthly interest rate.

(1)

b) The new interest charge.

(1)

c) The new balance.

(1)

d) The minimum payment required

(1)

e) The credit available.

(1)

Page |6
 Interest & Credit Date: ________________

2) Allie has a credit card with a monthly limit of $8000 and an annual interest rate charge
of 19.8%. Her minimum monthly payment must be $200 or 10% whichever is greater.
She had a previous balance of $3500, and made purchases totaling $1480. She made a
payment of only $3300. Determine:

a) The monthly interest rate.

(1)

b) The new interest charge.

(1)

c) The new balance.

(1)

d) The minimum payment required

(1)

e) The credit available.

(1)

Page |7
 LOANS ASSIGNMENT

* For full marks, show all work.*

Round answers to two decimal places. 13
Use the tables on the following page.

1) Jesse requires a personal loan of $10 000 for home renovations. His bank offers him a
three-year loan at 10.25%.
a) How much must Jesse pay the bank each month?

(3)

b) How much will he pay for the loan?

(2)

c) How much interest will Jesse have paid at the end of three years?

(1)

2) Amy would like to buy a computer. She has found one that she likes for $2400 plus
taxes. She does not have enough money right now so she decides to take out a personal
fixed rate loan.

a) How much will she need to borrow?

(1)

b) How much will she pay each month if the loan has a term of two years?

(3)

c) How much interest will she pay?

(3)

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Interest & Credit Date: ________________

Table 1:
Range 1 year 2 years 3 years 4 years 5 years
Less than $5000 12.75% 12.75% - - -
$5000 - $15 000 9.75% 10.00% 10.25% 10.50% 11.00%
$15 000 - $30 000 9.25% 9.75% 9.75% 10.00% 10.25%
Over $30 000 8.50% 8.75 9.25% 9.50% 9.75%

Table 2:
Personal Loan Payment
Monthly Payment per $1000

Annual Interest 1 year 2 years 3 years 4 years 5 years

Rate
10.00% 87.92 46.14 32.27 25.36 21.25
10.25% 88.03 46.26 32.38 25.48 21.37
10.50% 88.15 46.38 32.50 25.60 21.49
10.75% 88.27 46.49 32.62 25.72 21.62
11.00% 88.38 46.61 32.74 25.85 21.74
11.25% 88.50 46.72 32.86 25.97 21.87
11.50% 88.62 46.84 32.98 26.09 21.99
11.75% 88.73 46.96 33.10 26.21 22.12
12.00% 88.85 47.07 33.21 26.33 22.24
12.25% 88.97 47.19 33.33 26.46 22.37
12.50% 89.08 47.31 33.45 26.58 22.50
12.75% 89.20 47.42 33.57 26.70 22.63
13.00% 89.32 47.54 33.69 26.83 22.75
13.25% 89.43 47.66 33.81 26.95 22.88
13.50% 89.55 47.78 33.94 27.08 23.01
13.75% 89.67 47.89 34.06 27.20 23.14
14.00% 89.79 48.01 34.18 27.33 23.27

Page |9
 PROMOTIONS ASSIGNMENT

* For full marks, show all work.*

Round answers to two decimal places. 8
1) Jacquelines washing machine broke. She goes shopping and finds a washing machine
for $889.45 plus taxes. The store offers an installment plan for $150.00 down and
$90.00 a month for 12 months.

a) Calculate the cash selling price of the washing machine.

(1)

b) Calculate the installment price of the washing machine.

(2)

c) In your opinion, should she purchase the washing machine in installments?

(1)

2) Rene purchases a sofa. He can either pay for the sofa at the time of purchase or on
the buy-now pay-later plan. The cash price for the sofa is $924.5 (plus taxes) and the
delivery charge is $25.00. The buy-now pay-later plan cost of the sofa is $999.95 plus
taxes, a $25.00 delivery charge, and a $49.95 administration fee (plus taxes). He has
one year to pay for his purchase without any interest charges.

a) Calculate Renes pay-now price.

(1)

b) Calculate how much Rene has to pay if he chooses the buy-now play later option.

(2)

c) How much more does Rene pay if he chooses the pay-later option?

(1)

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