Simple Interest
1. On August 5, 2014, Wang took out an 8 % per year loan for $12,000. The loan is due September 9, 2014. Use ordinary interest to calculate the interest. What total amount will Wang pay on September 9, 2014?
Susan took out the same loan as Wang. Susan's terms, however, are exact interest. What is her difference in interest? What will she pay on September 9, 2014?
2. Andy bought a computer and printer at the store. The printer had an $800 list price with a $200 trade discount and 3/10, n/30 terms. The computer had a $1,600 list price with a 25% trade discount but no cash discount. On the computer, the store offered Andy the choice of (1) paying $50 per month for 17 months with the 18th payment paying the remainder of the balance or (2) paying 8% interest for 18 months in equal payments.
Assume Andy could borrow the money for the printer at 8% to take advantage of the cash discount. How much would Andy save? (Assume 360 days.)
On the computer, what is the difference in the final payment between choices 1 and 2?
1. On August 5, 2014, Wang took out an 8 % per year loan for $12,000. The loan is due September 9, 2014. Use ordinary interest to calculate the interest. What total amount will Wang pay on September 9, 2014?
Susan took out the same loan as Wang. Susan's terms, however, are exact interest. What is her difference in interest? What will she pay on September 9, 2014?
2. Andy bought a computer and printer at the store. The printer had an $800 list price with a $200 trade discount and 3/10, n/30 terms. The computer had a $1,600 list price with a 25% trade discount but no cash discount. On the computer, the store offered Andy the choice of (1) paying $50 per month for 17 months with the 18th payment paying the remainder of the balance or (2) paying 8% interest for 18 months in equal payments.
Assume Andy could borrow the money for the printer at 8% to take advantage of the cash discount. How much would Andy save? (Assume 360 days.)
On the computer, what is the difference in the final payment between choices 1 and 2?
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