CAP Business Math and Calculations 2

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).

Accepted Answer

$75.00

Answer

$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?

Accepted Answer

$50.00

Answer

$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?

Accepted Answer

$85.00

Answer

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?

Accepted Answer

$400

Answer

$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?

Accepted Answer

$1,575.00

Answer

List price: 500 × $3.50 = $1,750.00; discount: $1,750.00 × 10% = $175.00; net: $1,750.00 − $175.00 = $1,575.00.

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