In-class task #3
1.Â Chapter 7â€‰â€“â€‰Questions
SportZ Ltd. purchases materials and services from various vendors. Money has been borrowed from the Bank of Alberta. Payments to the vendors and the bank are being planned.
a) SportZ has invoices for materials purchased from Platinum Steel Inc. The invoices are for $4242 due 60 days ago, $12 567 due in 30 days, and $18,451 due in 140 days. If SportZ pays all of these invoices today, how much cash is needed? Money is worth 6% per annum.
b) Creative Inc., a design company, has sent SportZ an invoice for services provided in the amount of $15,000, due today. Alternatively, they will accept payment of $15,150 in 50 days. What interest rate is being charged?
2.Â Chapter 7â€‰â€“â€‰Question
Jake owed Terry $3690 nine months ago and Jake also owed Charles $4008 three months ago. If Jake wanted to repay both of these debts today, determine the single payments that would full repay the debts. Allow for simple interest at 0.8%.
3.Â Chapter 8â€‰â€“â€‰Question
A father wanted to show his son what it might be like to borrow money from a financial institution. When his son asked if he could borrow $120, the father lent him the money and set up the following arrangements. He charged his son $6 for the loan of $120. The son therefore received $114 and agreed to pay his father 12 installments of $10 a month, beginning one month from today, until the loan was repaid. Calculate the approximate rate of simple interest the father charged on this loan.