Question

Colleen Ellis bank granted her a single-payment loan of 5000 for 90 days at 9 percent ordinary interest. What is the maturity value of the loan

A. 5,112.50

B. 5,692.00

C. 5,872.10

D. 5,150.00

Answer 1

A would be correct. Hope i helped

Answer 2

Maturity value of the loan is 5,112.50

Explanation:

Ordinary interest is calculated on a basis of 360 days, so that time in 90 days would give;

`(90)/(360)` = 0.25

Principal = 5000

rate = 9%

time = 0.25

I =
`(PRT)/(100)`

where I is the ordinary interest

=
`(5000* 0.25*9)/(100)`

= 112.5

I = 112.5

the matured value of the loan is P + I

= 5000 + 112.5

= 5112.5