Question

Find the maturity value of a loan of $6787 after 4 months. the loan carries a simple interest rate of 14% per year.​

Answer 1

Principal, P = 6787
Interest rate, i = 14% per year (simple)
Time, t=4/12=1/3 year

Maturity value
F=P(1+it)
=6787(1+0.14*(1/3))
= 7103.73 (to the nearest cent)

Answer 2

Answer : The maturity value of a loan is, $7103.73

Step-by-step explanation :

Given:

Principle = $6787

Rate = 14 % per year

Time = 4 months =
`(4)/(12)years=(1)/(3)years`

First we have to determine the simple interest.

Formula used :

`S.I=(PRT)/(100)`

where,

P = principle

R = interest rate

T = time

S.I = simple interest

Now put all the given values in the above formula, we get:

`S.I=((\$6787)* (14)* ((1)/(3)))/(100)`

`S.I=\$316.73`

Now we have to calculate the maturity value of a loan.

Maturity value of a loan = Principle + Simple interest

Maturity value of a loan = $6787 + $316.73

Maturity value of a loan = $7103.73

Thus, the maturity value of a loan is, $7103.73