Question

A 60-day, 5% note for $20,400, dated May 1, is received from a customer on account. The maturity value of the note, assuming a 360-day year, is

a. $170
b. $20,570
c. 521,420
d. $20,400

Answer 1

The correct answer is C.The maturity value of the note is $21,420.

Step-by-step explanation:

The maturity value of a note is calculated by adding the principal amount and the interest earned.

In this case, the principal amount is $20,400 and the interest rate is 5%.

To calculate the interest earned, we multiply the principal amount by the interest rate: $20,400 x 0.05 = $1,020.

So, the total amount at maturity is the sum of the principal amount and the interest earned:

$20,400 + $1,020 = $<<20400+1020=21420>>21,420.