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Simple Interest, SMB-023

Jevin has a bank account that pays him simple interest.

The bank statement below shows the transactions on Jevin’s account for the month of July.
  

  1. What amount, in dollars, did Jevin deposit in cash on 11 July?  (1 mark)

Interest for this account is calculated on the minimum monthly balance at a rate of 3.0% per annum.

  1. Calculate the interest for July, correct to the nearest cent.  (2 marks)

Show Answers Only
  1. `$620`
  2. `$15.30`
Show Worked Solution
a.    `text(Deposit)` `= 6870.67-6250.67`
    `= $620`

 

b.   `text(Minimum Balance) = $6120.86`

`I` `=Prn`
  `= 6120.86 xx 3/100 xx 1/12`
  `= 15.302…`
  `= $15.30`

Simple Interest, SMB-022

The transaction details for a savings account for the month of August 2014 are shown in the table below.

The table is incomplete.
  

 

Simple interest is calculated and paid monthly on the minimum balance for that month.

Calculate the annual simple interest rate paid on this account, correct to two decimal places.   (4 marks)

Show Answers Only

`text{3.75%}`

Show Worked Solution

`text(Minimum balance for month) = $4870.50`

`text{Interest paid}\ = 5885.72-5870.50= $15.22`

`I` `=Prn`
`15.22` `= 4870.50 xx r xx 1/12`
`:. r`  `=(15.22 xx 12)/4870.50`
  `= 0.03749…`
  `= 3.75text{%   (2 d.p.)}`