Question

Dontice Thomas obtained a single-payment loan of $21,400 to purchase a diamond necklace and bracelet set. She agreed to repay the loan in 120 days at an ordinary interest rate of 8.5%. What is the maturity value of her loan?

Answer 1

To calculate the maturity value of the loan, use the simple interest formula: Maturity Value = Principal + (Principal * Rate * Time). Plugging in the given values, the maturity value of the loan is approximately $21,585.01.

Step-by-step explanation:

To calculate the maturity value of the loan, we need to use the simple interest formula: Maturity Value = Principal + (Principal * Rate * Time)

In this case, the Principal is $21,400, the Rate is 8.5% (or 0.085 as a decimal), and the Time is 120 days (or 120/365 as a decimal).

Plugging in these values, we get: Maturity Value = $21,400 + ($21,400 * 0.085 * (120/365))

Simplifying the expression, we find that the maturity value of the loan is approximately $21,585.01

Answer 2

I believe the answer is $23,219. 8.5% of 21,400 is $1,819. 1,189 + 21,400, is 23,219.
Hope this helps!:)