Final answer:
The maturity value of the note on March 1 is calculated by adding the interest earned over the 120-day period at a 12% interest rate to the principal amount. With a principal of $24,300 and calculated interest of $972.00, the maturity value comes to $25,272.00.
Step-by-step explanation:
The student has asked to calculate the maturity value of a note payable on March 1, considering the note was signed on November 1 with a duration of 120 days at a 12% interest rate with a face value of $24,300, using a 360-day year for interest calculation. To compute the maturity value, first calculate the total interest and then add it to the principal amount to obtain the maturity value. The calculation steps are as follows:
- Calculate the number of days the note will be outstanding (from November 1 to March 1).
- Compute the interest using the formula: Interest = Principal × rate × (time/360).
- Add the interest to the principal to get the maturity value.
The number of days from November 1 to March 1 is actually 120 days, confirming the duration of the note. Therefore, the associated interest can be calculated as follows:
Interest = $24,300 × 0.12 × (120/360) = $972.00
The maturity value of the note on March 1st is the sum of the principal and the interest, which is:
Maturity Value = Principal + Interest
Maturity Value = $24,300 + $972.00
Maturity Value = $25,272.00
Therefore, the maturity value of the note on March 1 is $25,272.00.