Answered: Calculate (a) the interest payable and…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 18E

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Calculate (a) the interest payable and (b) the total amount owing on the following
deposits at simple interest.
 300 borrowed for 5 years at 8% p.a.
 (ii)1000 invested for 4 years at 9.5% p.a.
 50 borrowed for 2 years at 18% p.a.
 2500 invested for 6 months at 8.75% p.a. (T = 0.5 years)
 45 000 borrowed for 2 weeks at 15.5% p.a.

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Follow-up Question

The following questions relate to simple interest.
2.
What is the actual rate of interest if £4000 deposited for 3 years attracts interest of
£1440?
3.
For how long would £500 have to be left in an account paying 4% interest p.a. to
give a balance of £600 ?
4.
A school's rich benefactor wants to deposit a certain sum in an account paying
interest at 10.5% so that it will produce interest of £1200 per year, to pay for
scholarships. How much should she deposit?
5.
A boy borrows £1.00 from his sister and promises to pay back £1.10 a week later.
What is this as an annual rate of interest?
6.
For how long should a depositor leave a sum in a 6.25% p.a. savings account in
order to earn the same amount in interest, assuming the interest is withdrawn each
year?

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