Question

Calculate the simple interest and maturity value for the following. Principal: $6,400, interest rate: 5%, time: 14 months.

Answer 1

To calculate the simple interest, multiply the principal, interest rate, and time. The maturity value can be found by adding the principal and interest.

Step-by-step explanation:

To calculate the simple interest, we can use the formula: Interest = Principal × Rate × Time.

Plugging in the given values:

• Principal: $6,400
• Interest Rate: 5% (or 0.05 as a decimal)
• Time: 14 months (or 14/12 years)

Calculating the simple interest:

Interest = $6,400 × 0.05 × (14/12) = $448.

To find the maturity value, we can use the formula: Maturity Value = Principal + Interest.

Calculating the maturity value:

Maturity Value = $6,400 + $448 = $6,848.