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    Math applications for business

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    ? Linda received $875 on an investment of $14,000 at 15% annual simple interest rate. How long was the money invested?

    ? Freddy borrowed $10,000 for a car for 3 years and paid $1,500 in simple interest. What was the rate of interest?

    ? Diana owns municipal bonds valued at $14,500, which is 12% of her total investments. What is the value of her total investments? Round to the nearest dollar?

    ? What is the straight-line depreciation for a machine that was purchased for $15,000, cost $750 to install, has a useful life of six years and a salvage value of $500.

    ? Anita Tooms bought a new computer system. To pay for the system, she borrowed $2670 from the credit union at 7 1/3% interest for 85 days. Find the ordinary interest owed.

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    Solution Preview

    1. Simple Interest, I = Prt / 100
    where P= principal value = $14000
    r = rate of interest = 15%
    so I = $875 = ($14000 * 15 * t ) /100
    i.e. t = ($875 * 100)/ ($14000*15) = 0.41 years = 152 days
    Linda invested money for 152 days

    2. Simple Interest, I = Prt / 100
    where P= principal value = $10000
    r = rate of interest
    t= 3 years ...

    $2.19

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