Simple Interest and Simple Discount

In these questions, you will need to use the date that unit 4 starts for your class. List the date that Unit 4 started for your class:

Unit 4 start date: 03/19/2015  Please use this date to answer following questions:

Question 1

(10 points)

1. You decide to take out a simple interest loan for $5000, at 7% yearly interest on the date that unit 4 starts for you. If you repay the loan on December 31st (at the end of the current year)…

a) How much do you pay total when you pay off the loan?

b) How much interest do you pay?

Question 2

(15 points)

2. You decide to take out a $20000 simple interest loan at 4%, on the date unit 4 started for you.

a) In 45 days you decide to pay off $8000 of the loan. What is your new principal? Explain how you got the answer.

b) 30 days after the first payment, you pay another $6000. What is your new principal? Explain how you got the answer you did.

c) 45 days after the 2nd payment, your loan comes due. How much do you need to pay then? Explain your reasoning.

Question 3

(5 points)

3. You need $400 badly, and decide to write a check at a check cashing place to get that money. Assuming you much write the check for $500 to get the $400 in cash, and the check will be cashed in 2 weeks, what simple interest rate did you just pay? Assume 52 weeks in a year for this problem

Essay

(15 points)

4. Same as cash deals are becoming very popular these days. Research a couple same as cash deals and write an essay explaining the advantages and disadvantages of each. When would one of these deals be a good deal for a person? When would using a same as cash deal be a poor idea?

Requirements

• Write your essay in this document – do not save it in a separate file.

• You must clearly state your position with well-structured paragraphs using proper grammar, spelling, and sentence structure.

• This is not an “opinion” question – you must offer evidence to support your position, using properly-cited sources.

• Your answer must be between ¾-1 page in length.

• You must cite and reference at least one source (book, website, periodical) using APA format.

• Do not use unreliable sources such as Wikipedia, and Yahoo! Answers.