Do exercise set 8.2 the following numbers 3, 5, 7, 11, 13

CHAPTER 8 Consumer Mathematics and Financial Management EXAMPLE 6 A Discounted Loan You borrow $10,000 on a 10% discounted loan for a period of 8 months. a. What is the loan's discount? b. Determine the net amount of money you receive. c. What is the loan's actual interest rate? Solution a. Because the loan's discount is the deducted interest, we use the simple interest formula. I = Prt = (10,000) (0.10) () ~ 666.67 Principal is $10,000. Rate is Time is 8 months 10% = 0.10. = = 3 year. The loan's discount is $666.67. b. The net amount that you receive is the amount of the loan, $10,000, minus the discount, $666.67: 10,000 - 666.67 = 9333.33. Thus, you receive $9333.33. c. We can calculate the loan's actual interest rate, rather than the stated 10%, by using the simple interest formula. I = Prt This is the simple interest formula. 666.67 = (9333.33)r WIN (interest) = $666.67, P (principal, or the net amount received) = $9333.33, and t = 3 year. 666.67 = 6222.22r Simplify: 9333.33 3 = 6222.22 . 666.67 Solve for r and express r to the nearest ~0.107 = 10.7% 6222.22 tenth of a percent. The actual rate of interest on the 10% discounted loan is approximately 10.7%. You borrow $5000 on a 12% discounted loan for a period of two years. POINT 6 Determine: a. the loan's discount; b. the net amount you receive; c. the actual interest rate. Exercise Set 8.2 Practice Exercises 7. P = $15,500, r = 11%, t = 90 days In Exercises 1-8, the principal P is borrowed at simple interest rate 8. P = $12,600, r = 9%, t = 60 days r for a period of time t. Find the simple interest owed for the use of In Exercises 9-14, the principal P is borrowed at simple interest the money. Assume 360 days in a year. rate r for a period of time t. Find the loan's future value, A, or the 1. P = $4000, r = 6%, t = 1 year total amount due at time t. 2. P = $7000, r = 5%, t = 1 year 9. P = $3000, r = 7%, t = 2 years 3. P = $180, r = 3%, t = 2 years 10. P = $2000, r = 6%, t = 3 years 4. P = $260, r = 4%, t = 3 years 11. P = $26,000, r = 9.5%, 1 = 5 years 12. P = $24,000, r = 8.5%, 1 = 6 years 5. P = $5000, r = 8.5%, t = 9 months 13. P = $9000, r = 6.5%, t = 8 months 6. P = $18,000, r = 7.5%, t = 18 months 14. P = $6000, r = 4.5%, t = 9 months