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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.

#### 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