Question

On September 1, 2019, Parker, Inc. made a loan to one of its customers. The customer signed an 8-month note for $105,000 at 14%. Calculate the maturity value of the note. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

Answer 1

Answer:Maturity value =$115,000

Step-by-step explanation:

Maturity value is the amount that includes the principal and accrued interest that a borrower should pay on its maturity date.

Maturity value of note = Principal + interest accrued

Interest = Principal x rate x time

=$105,000 x 14% X 8/12

=$9,800

Maturity value = $105,000 + 9,800

=$114,800

rounding up to the nearest dollar≈$115,000