Interest exercises Pagina 1 di 9

Exercise n. 1

Which months have 30 days?

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ν August, June, September, November
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ν May, April, June, November
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ν April, June, September, November
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ν February, June, September, November

Write (6 +3/4)% as a decimal.

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ν 6.75
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ν 0.675
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ν 67.5
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ν 0.0675

Exercise n. 2

A loan made on July 15 was repaid on October 22. What is the time of the loan?

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ν 98 days How to calculate the time of a
loan:
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ν 95 days
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ν 99 days the first day is excluded

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ν 94 days the last day is included

Mary Watts borrowed 562 on June 24 for sixty days with a 365 day year. What is the date of
repayment or the maturity date?

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ν August 24
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ν August 22
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ν August 25
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ν August 23
Interest exercises Pagina 2 di 9

Use the simple interest formula to find the rate on an 1,800 loan for which the interest was 20 for
40 days (use a 360-day year).

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ν 10%
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ν 20%
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ν 1.0%
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ν 0.1%

Exercise n. 3

Which is the correct formula for time using the simple interest formula?

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ν t = I x C x t x100
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ν t = I x 100 /(C x r)
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ν 100 x t = C/(I x r)
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ν t = r/(I x C) x 100

Find the total amount repaid for a loan for 200 at 5% simple interest for 72 days using a 360-day
year.

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ν 220
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ν 202
ϕ
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ν 204
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ν 240

Find the interest on a loan of 3,400 for one year at a simple interest rate of 12% per year.

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ν 400
ϕ
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ν 340
ϕ
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ν 428
ϕ
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ν 408

Exercise n. 4

Mr. Green borrowed 35,000 to buy stock (scorte di merce), for his shoe shop. He repaid the
simple interest loan after four years. He paid interest of 6,750. What was the interest rate?

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ν 19.29%
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ν 4.82%
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ν 16.8%
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ν 20.74%
Interest exercises Pagina 3 di 9

Find the due date using ordinary time for a loan made on September 15 for 120 days.

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ν January 16
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ν January 14
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ν January 13
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ν January 15

Find the exact interest on a loan of 3,500 at 12,50% annual simple interest for 45 days.

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ν 54.69
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ν 53.94
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ν 45.00
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ν 51.78

Exercise n. 5

A loan of 2,000 with a simple annual interest rate of 14% was made on June 14 and was due on
August 14 of the same year. Find the exact interest using exact time.

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ν 46.03
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ν 41.23
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ν 46.79
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ν 46.67

Use the exact time to find the due date of a loan that is made on February 10 of a leap year (anno
bisestile) and is due in 60 days.

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ν April 11
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ν April 12
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ν April 9
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ν April 10

A loan made on February 10 is due September 10 of the same year. Find the ordinary time for the
loan if it is not a leap year.

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ν 211 days
ϕ
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ν 213 days
ϕ
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ν 210 days
ϕ
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ν 212 days
Interest exercises Pagina 4 di 9

Exercise n. 6

The price paid for using money is called ____________.

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ν principal
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ν rate
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ν interest
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ν loan

________ is the amount of money borrowed or invested.

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ν interest
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ν principal
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ν principle
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ν rate

__________ is the percent of the principal paid as interest per time period.

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ν principal
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ν interest
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ν rate
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ν principle

________ is the number of days, months, or years that the money is borrowed or invested.

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ν rate
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ν principal
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ν time
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ν mortgage (ipoteca)

_________ value is the amount of the loan plus the interest.

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ν loan
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ν future
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ν initial
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ν opening

________ time is based on counting 30 days in each month.

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ν exact
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ν preferred
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ν ordinary
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ν common
Interest exercises Pagina 5 di 9

Exercise n. 7

To furnish her new apartment, Eleanor Chin borrowed 6,000 at 9.2% interest for 11
months. How much interest will she pay? Would the interest be different using a 365-day
year?
Rick borrows 20,000 from his parents at 5.25% to add a room on his house. He plans to
repay the loan in 9 months with a bonus (premio, gratifica) he expects to receive at that time.
Calculate the future value.
To pay for textbooks (libri di testo), a student borrows 450 from a credit union (credito
cooperativo) at 6.5% simple interest. He will repay the loan in 38 days, when he expects to
be paid for tutoring. How much interest will he pay? (assume a 365 day year).

Exercise n. 8

A savings account of 31,067.96 today would produce 32,000 in 4 months. What is the
interest rate?
Today the 5th January because of a legal settlement (accordo legale), Charles Clinton owes
(deve) 5,000 to Jeremy Spencer, that must be paid on July 22 at an annual rate of 9%;
using a 360-day year, what amount should be considered the present value? Use the
inverse formula of FV

Exercise n. 9

Suppose you borrow 40,000 today and are required (richiesto) to pay 41,400 in 4 months
to pay off (saldare, estinguere) the loan and interest. What is the simple interest rate?
A 100,000 certificate of deposit (CD) held (tenuto) for 60 days is worth (vale) 101,133.33.
To the nearest 10th of a percent what interest rate was earned (guadagnato)? Solve using
both the exact and the ordinary simple interest
A firm of accountants (contabili) ordered seven new computers at a cost of 5,104 each. The
machines will not be delivered (consegnate) for seven months. What amount could the firm
deposit in an account paying 6.42% to have enough to pay for the machines? Use the
inverse formula of FV
Interest exercises Pagina 6 di 9

Exercise n. 10

Look at the following timelines and complete filling in the blanks:

Write the resolutive formula of the future value at the third year (1st timeline)
What is the annual interest rate in the 2nd timeline?
Write the resolutive formula of the future value at the fourth month (2nd timeline)

Exercise n. 11- Writing & Speaking

Answer the following questions orally and then write them below

Who is the borrower?

On what depends the amount of interest?

Explain why the denominator of the exact simple interest formula is 36,500:

How many years does it take the present value of 1,000 to double at the interest rate of
20%?

Comment the simple interest formula

Interest exercises Pagina 7 di 9

Exercise n. 12

Fill in the blanks using the appropriate word:

rate - present value - borrowed - length - time

When money is ____________, interest is charged for the use of that money for a certain period of
_____. When the money is paid back, the principal (amount of money that was borrowed) and the
interest is paid back. The amount to interest depends on the interest _____, the amount of money
borrowed (______________) and the _______ of time that the money is borrowed.

Exercise n. 13

Complete each line of the following table:

SIMPLE INTEREST
Present Value Rate Time Interest
450 5% 4 years
4% 2 months 6.00
1,200 6% 8 months
9,400 155 days (1) 127.74
5,000 6.5% 324 days (2)
16.000 5.6% (2) 806.40

(1) calendar year (anno civile) 365 days per year

(2) commercial year (anno commerciale) 360 days per year

Exercise n. 14

Fill in each blank of the following table:

1. principal 49,254 2. principal ________

interest rate 13.11% interest rate 4.95%
years ________ months 9
simple simple
6,457.20 88,579.32
interest interest
Interest exercises Pagina 8 di 9

3. principal 4,614 4. principal 415,938

interest rate ________ interest rate ________
time 4 months days/360 16
simple simple interest 820.47
112.28
interest

5. principal 39,845 6. principal 6,691

interest rate 9.5% interest rate 1.29%
time 6 months days/360 ________
simple simple interest 28.77
________
interest

7. principal 13,522 8. principal ________

interest rate ________ interest rate 8.62%
days/365 4 days/360 150
simple simple interest 4,292.22
6,674.46
interest

9. principal $729,021 10. principal 14,893

interest rate 2.2% interest rate 3.64%
time 1 months months ________
simple simple
________ 316.23
interest interest
11. principal 53,388 12. principal 121,175
interest rate 5.6% interest rate 10.21%
time 9 months days/365 34
simple simple
________ ________
interest interest

Exercise n. 15

Rebecca is a seamstress (sarta) who just opened her first shop. She has decided to invest
her first 2,000 in an account for her retirement (pensionamento, collocamento a riposo)
where interest is annually at 10.5%. If Rebecca plans to work for 35 years, how much money
will she have in that account when she retires? Use the direct formula (FV)
Keith wants to buy a grand piano when he finishes his masters degree (laurea specialistica)
in 3 years. He has found a bank that will give him an interest rate of 12% annually. If he will
need 15 000 for the piano, how much does he need to invest now? (use the inverse formula
of the future value)
Interest exercises Pagina 9 di 9

Exercise n. 16

Listen to the audio "U.S. Interest rate (special english)":

a) Write the unknown words and the corresponding ones in italian

English Italian Notes

b) Write below the text you are hearing (as much as you want)