Question

Tim Hanes' bank granted him a single payment loan of $1,000 for 100 days at 12 percent ordinary interest. What is the maturity value of the loan?

a. $1,578.01
b. $1,033.33
c. $1,120.00
d. $1,044.55​

Answer 1

$1032.87

Explanation:

First we need to calculate the interest

Interest = Principal * rate * time/100

Interest = 1000 * 12 * 100/365 * 100

Interest = 12000/365

Interest = 32.87

maturity value = Principal + Interest

maturity value = 1000 + 32.87

maturity value = $1032.87