Question

A 60-day, 9% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is Select one:

a. $10,000
b. $10,150
c. $10,900
d. $9,100

Answer 1

I would say $10,150. The 10,000 principal x 1.09 = 10,900 but this would be for 9% for one year whereas the term is 60 days or approx. 2 months or 1/6 of a year so the increase would be 900/6 = 150 so the total value would be $10,150.