Final answer:
The maturity value of a $5316.75 investment over 16 months at a 6.3% simple interest rate is $5765.95. The interest earned over this period is calculated first, then added to the principal to find the total maturity value.
Step-by-step explanation:
To calculate the maturity value of a $5316.75 investment over 16 months, earning 6.3% simple interest, we can use the formula for simple interest: Interest = Principal × rate × time. First, we need to convert the interest rate from a percentage to a decimal by dividing it by 100. So, 6.3% becomes 0.063. We also need to express the time of 16 months in years since interest rates are typically annual rates. Since there are 12 months in one year, 16 months is equivalent to ⅓ years (or approximately 1.3333 years).
Using the formula:
- Interest = $5316.75 × 0.063 × ⅓
- Interest = $5316.75 × 0.063 × 1.3333
- Interest = $449.20 (rounded to the nearest cent)
After calculating the interest, we find the total maturity value by adding the interest to the principal:
- Maturity Value = Principal + Interest
- Maturity Value = $5316.75 + $449.20
- Maturity Value = $5765.95
Therefore, the maturity value of the investment is $5765.95.