Answer:
Therefore, the maturity value of the loan is $2568.75.
Explanation:
To calculate the maturity value of the loan, we need to add the interest to the principal.
First, we need to find out how much interest Ricardo will owe for the 180-day period.
The formula for calculating ordinary interest is:
Interest = Principal x Rate x Time
where:
Principal = $2500
Rate = 7.8% = 0.078 (expressed as a decimal)
Time = 180/360 (since the interest is for a 180-day period and the rate is an annual rate)
Time is expressed as a fraction of a year because the rate is an annual rate. In this case, the time is 180/360 because the loan is for 180 days, which is half of a year.
Using the formula above, we can calculate the interest as follows:
Interest = $2500 x 0.078 x 180/360 = $68.75
Therefore, Ricardo will owe $68.75 in interest for the 180-day period.
To find the maturity value of the loan, we add the interest to the principal:
Maturity Value = Principal + Interest = $2500 + $68.75 = $2568.75
Therefore, the maturity value of the loan is $2568.75.