CAP Business Math and Calculations 2 — Questions and Answers
Question 1: Using the simple interest formula I = PRT, calculate the interest on a $5,000 loan at 6% annual interest for 90 days (use a 360-day year).
- $73.97
- $74.52
- $75.00 (Correct answer)
- $300.00
Correct answer: $75.00
$5,000 × 0.06 × (90 ÷ 360) = $5,000 × 0.06 × 0.25 = $75.00.
Question 2: A product that costs $40.00 is marked up by 25%. What is the selling price?
- $45.00
- $48.00
- $50.00 (Correct answer)
- $52.00
Correct answer: $50.00
$40.00 × 1.25 = $50.00.
Question 3: An item is on sale for $68.00, which is 20% off the original price. What was the original price?
- $80.00
- $82.00
- $85.00 (Correct answer)
- $88.00
Correct answer: $85.00
The sale price represents 80% of the original; $68.00 ÷ 0.80 = $85.00.
Question 4: A company borrows $10,000 at 8% annual interest for 6 months. How much simple interest will be owed?
- $400 (Correct answer)
- $800
- $480
- $240
Correct answer: $400
$10,000 × 0.08 × (6 ÷ 12) = $10,000 × 0.08 × 0.5 = $400.
Question 5: A company purchases 500 units at $3.50 each and receives a 10% trade discount. What is the net cost?
- $1,575.00 (Correct answer)
- $1,600.00
- $1,625.00
- $1,750.00
Correct answer: $1,575.00
List price: 500 × $3.50 = $1,750.00; discount: $1,750.00 × 10% = $175.00; net: $1,750.00 − $175.00 = $1,575.00.
Question 6: An accounts receivable balance of $12,000 increases by 15% over the prior month. What is the new balance?
- $13,200
- $13,500
- $13,800 (Correct answer)
- $14,400
Correct answer: $13,800
$12,000 × 1.15 = $13,800.
Question 7: Which formula correctly calculates the percent of increase between two values?
- (New Value − Old Value) ÷ Old Value × 100 (Correct answer)
- (Old Value − New Value) ÷ New Value × 100
- (New Value ÷ Old Value) × 100
- (Old Value ÷ New Value) × 100
Correct answer: (New Value − Old Value) ÷ Old Value × 100
Percent of increase = [(New − Old) ÷ Old] × 100, which expresses the change relative to the starting value.
CAP Business Math and Calculations 2
Using the simple interest formula I = PRT, calculate the interest on a $5,000 loan at 6% annual interest for 90 days (use a 360-day year).