Prepared by Johnny Howard © 2015 South-Western, a part of Cengage Learning

13–2 © 2015 South-Western, a part of Cengage Learning

13–3 © 2015 South-Western, a part of Cengage Learning Credit Terms Credit gives the buyer immediate possession but does not require payment to the seller until some later date. Interest is the charge for doing this, and it is usually quoted as a percent of the amount of credit extended (the principal). Down payment is the part of the price paid at the time of purchase. The interest period (term of the loan) is the length of time that interest is charged between the loan date and the repayment date. T E R M S 1

13–4 © 2015 South-Western, a part of Cengage Learning Credit Terms (cont’d) Short-term credit transactions are those whose term is between 1 day and 1 year. Long-term credit transactions are those for longer than 1 year. T E R M S 1

13–5 © 2015 South-Western, a part of Cengage Learning

13–6 © 2015 South-Western, a part of Cengage Learning

13–7 © 2015 South-Western, a part of Cengage Learning

13–8 © 2015 South-Western, a part of Cengage Learning Computing Ordinary Interest E X A M P L E Computing Exact Interest E X A M P L E 2,3

13–9 © 2015 South-Western, a part of Cengage Learning Comparing Ordinary Interest and Exact Interest E X A M P L E 4

13–10 © 2015 South-Western, a part of Cengage Learning Estimating Exact Simple Interest E X A M P L E 5

13–11 © 2015 South-Western, a part of Cengage Learning Table 13.1Rate and Time

13–12 © 2015 South-Western, a part of Cengage Learning

13–13 © 2015 South-Western, a part of Cengage Learning Table 13.2PRT Formulas

13–14 © 2015 South-Western, a part of Cengage Learning

13–15 © 2015 South-Western, a part of Cengage Learning

13–16 © 2015 South-Western, a part of Cengage Learning Chapter Terms for Review commercial paper down payment exact interest method interest interest period long-term credit ordinary interest method principal short-term credit simple interest term of the loan time

13–17 © 2015 South-Western, a part of Cengage Learning Assignment 13.1 Simple Interest A Compute the simple interest. If the time is given in months, let one month be of a year. If the time is in days, let one year be 360 days.

13–18 © 2015 South-Western, a part of Cengage Learning Assignment 13.1 Simple Interest A Compute the simple interest. If the time is given in months, let one month be of a year. If the time is in days, let one year be 360 days. (cont’d)

13–19 © 2015 South-Western, a part of Cengage Learning Assignment 13.1 Simple Interest B Compute the ordinary interest, the exact interest, and their difference. Round answers to the nearest cent.

13–20 © 2015 South-Western, a part of Cengage Learning Assignment 13.1 Simple Interest B Compute the ordinary interest, the exact interest, and their difference. Round answers to the nearest cent. (cont’d)

13–21 © 2015 South-Western, a part of Cengage Learning Assignment 13.1 Simple Interest C In each problem, first find the actual exact simple interest. Then, estimate the interest by assuming a 360-day year and round each rate and time to the nearest numbers that will permit the shortcuts in Table Find the difference. Round answers to nearest cent.

13–22 © 2015 South-Western, a part of Cengage Learning Assignment 13.1 Simple Interest D Determine the missing variable by using one of the formulas. For problems 21 and 22, use a 360-day year. Round dollar amounts to the nearest cent. Round interest rates to the nearest 1/10 of a percent. Find the time in days, rounded to the nearest whole day.

13–23 © 2015 South-Western, a part of Cengage Learning Assignment 13.1 Simple Interest D Determine the missing variable by using one of the formulas. For problems 23, 24 and 25, use a 360-day year. Round dollar amounts to the nearest cent. Round interest rates to the nearest 1/10 of a percent. Find the time in days, rounded to the nearest whole day.

13–24 © 2015 South-Western, a part of Cengage Learning Assignment 13.1 Simple Interest D Determine the missing variable by using one of the formulas. For problem 26, 27, and 28 use a 365-day year. Round dollar amounts to the nearest cent. Round interest rates to the nearest 1/10 of a percent. Find the time in days, rounded to the nearest whole day.

13–25 © 2015 South-Western, a part of Cengage Learning Assignment 13.1 Simple Interest D Determine the missing variable by using one of the formulas. For problems 29 and 30, use a 365-day year. Round dollar amounts to the nearest cent. Round interest rates to the nearest 1/10 of a percent. Find the time in days, rounded to the nearest whole day.

13–26 © 2015 South-Western, a part of Cengage Learning Assignment 13.2: Simple Interest Applications A Solve each of the following ordinary simple interest problems by using a 360-day year. Find both the interest dollars and the total amount (i.e., principal plus interest) of the loan.

13–27 © 2015 South-Western, a part of Cengage Learning Assignment 13.2: Simple Interest Applications A Solve each of the following ordinary simple interest problems by using a 360-day year. Find both the interest dollars and the total amount of the loan. (cont’d)

13–28 © 2015 South-Western, a part of Cengage Learning Assignment 13.2: Simple Interest Applications A Solve the following ordinary simple interest problems by using a 360-day year. Find both the interest dollars and the total amount of the loan. (cont’d)

13–29 © 2015 South-Western, a part of Cengage Learning Assignment 13.2: Simple Interest Applications B Solve each of the following exact simple interest problems by using a 365-day year. Find both the interest dollars and the total amount (i.e., principal plus interest) of the loan. (cont’d)

13–30 © 2015 South-Western, a part of Cengage Learning Assignment 13.2: Simple Interest Applications B Solve each of the following exact simple interest problems by using a 365-day year. Find both the interest dollars and the total amount (i.e., principal plus interest) of the loan. (cont’d)

13–31 © 2015 South-Western, a part of Cengage Learning Assignment 13.2: Simple Interest Applications B Solve each of the following exact simple interest problems by using a 365-day year. Find both the interest dollars and the total amount (i.e., principal plus interest) of the loan. (cont’d)