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For a principal amount of USD 12,000.00, an interest rate of 10%, and a 4-month note dated June 5, 2005, calculate interest, maturity value, and due date

User Nick Jones
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Final answer:

To calculate interest, you multiply the principal by the rate and the time in years (USD 12,000 × 10% × 1/3), resulting in USD 400.00. The maturity value is the sum of the principal and interest, totaling USD 12,400.00. The due date is October 5, 2005, 4 months after June 5, 2005.

Step-by-step explanation:

To calculate the interest, maturity value, and due date for a principal amount of USD 12,000.00, an interest rate of 10%, and a 4-month note dated June 5, 2005, we can follow the formulas given. The formula to calculate interest is Interest = Principal × rate × time. Since time needs to be in years for our calculation, we convert the 4 months into years by dividing by 12, which becomes 4/12 or 1/3 of a year.

Therefore, the interest is calculated by Interest = 12,000 × 0.10 × 1/3, resulting in USD 400.00. The maturity value is the sum of the principal and the interest, which is Principal + Interest = 12,000 + 400, giving us a maturity value of USD 12,400.00. Lastly, to find the due date of the note, we add 4 months to the date of June 5, 2005. The due date falls on October 5, 2005.

User Tenmiles
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