1. Calculate the simple interest rate when P= $3600 I= $160 and=4 months. Round to theSectionnearest hundredth.4a. 13.33%b. 0.13%C. 1.11%d. 4.00%e. 4.44%2. Calculate the simple interest due on a four-month loan of $900 if the interest rate is 2.270 permonth.a. $79.20b. $7,920.00c. $237.60d. $6.60e. $979.203. The maturity value of a three-month loan of $2,500 is $2,577. Find the simple annual interestrate to the nearest hundredth.a. 12.32%b. 11.95%c. 3.70%d. 97.01%e. 3.08%4. What interest will be earned if $4000 is invested for 4 years at an annual rate of 7% compoundedmonthly?a. 5,288.22b. 4,094.15c. 4,166.22d. 5,120.00e. 6,501.65A = $26,000 r =9%5. Calculate the present value whencompounded quarterly, and1= 30years. Round to the nearest cent.

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Answered: 1. Calculate the simple interest rate…

1. Calculate the simple interest rate when P= $3600 I= $160 and4 months. Round to the nearest hundredth. a. 13.33% b. 0.13% C. 1.11% d. 4.00% e. 4.44%

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Interest Rate

When you deposit your money with the bank, the deposit earns you some extra money at the end of the specific period – something more than what you deposited. That amount of money that the bank pays you for keeping the money with the bank is the “interest” and the percentage at which the bank pays you for your amount is called the “interest rate”.

Question

1. Calculate the simple interest rate when P= $3600 I= $160 and=4 months. Round to the
Section
nearest hundredth.
4
a. 13.33%
b. 0.13%
C. 1.11%
d. 4.00%
e. 4.44%
2. Calculate the simple interest due on a four-month loan of $900 if the interest rate is 2.270 per
month.
a. $79.20
b. $7,920.00
c. $237.60
d. $6.60
e. $979.20
3. The maturity value of a three-month loan of $2,500 is $2,577. Find the simple annual interest
rate to the nearest hundredth.
a. 12.32%
b. 11.95%
c. 3.70%
d. 97.01%
e. 3.08%
4. What interest will be earned if $4000 is invested for 4 years at an annual rate of 7% compounded
monthly?
a. 5,288.22
b. 4,094.15
c. 4,166.22
d. 5,120.00
e. 6,501.65
A = $26,000 r =9%
5. Calculate the present value when
compounded quarterly, and
1= 30
years. Round to the nearest cent.

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