Problem 1. A $40,000 loan at 4 percent dated June 10 is due to be paid on October 11. The amount of interest (assume ordinary interest) is______.
a.$503.00
b.$2,500.00
c.$546.67
d.$105.33
e.None of these
Problem 2. Compounding:
a.calculates interest periodically.
b.looks into present when the future is known.
c.is done only on an annual basis.
d.results in less interest than simple interest.
e.None of these.
Problem 3. Which of the following results in crediting the checkbook balance?
a.NSF
b.service charge
c.interest earned
d.overdraft protection charge
e.None of these
Problem 4. Outstanding checks:
a.have been paid by the bank.
b.are checks returned to payor.
c.are bank checks.
d.have not been received by bank for processing.
e.None of these.
Problem 5. Sandra Gloy borrowed $5,000 on a 120 day, 5 percent note. Sandra paid $500 toward the note on day 40. On day 90 she paid an additional $500. Using the U.S. Rule, her adjusted balance after the first payment is_________.
a.$4,527.87
b.$4,725.87
c.$4,725.70
d.$4,527.78
e.None of these
Problem 6. The beginning checkbook balance of Shelley Co. is $5,559.10. Her bank statement showed a bank balance of $7,888.44. The bookkeeper of Shelley Co. noticed a $111.10 deposit in transit along with check numbers 90 and 97 for $499.88 and $1,256.45 respectively as outstanding. The bank statement credited Shelley's account for $750.99 for a note collected. The bank statement revealed a check printing charge of $66.88. The reconciled balance is_________.
a.$6,423.12
b.$6,243.21
c.$6,423.21
d.$4,623.21
e.None of these
Problem 7. Electronic funds transfer:
a.uses paper checks.
b.uses some paper checks.
c.does not use paper checks.
d.is a manual transfer system.
e.None of these.
Problem 8. $6,000 for 6 years at 8½% compounded daily will grow to ___________.
a.$8,991.02
b.$8,950.10
c.$9,991.20
d.$9,990.02
e.None of these
Problem 9. Interest is equal to:
a.principal rate divided by time
b.principal divided by rate time
c.principal time
d.principal rate time
e.None of these
Problem 10. Jim Murphy borrowed $30,000 on 120-day fourteen percent note. Jim paid $5,000 toward the note on day 95. On day 105 he paid an additional $6,000. Using the U.S. Rule, Jim's adjusted balance after the first payment is___________.
a.$25,000.00
b.$28,891.67
c.$1,108.33
d.$26,108.33
e.None of these