Question

What is the maturity value given the following:$10,200 at 9.5% for 10 months

Answer 1

Determine the maturity value:

First convert 9.5% to 0.095 and 10 months to 1 year.

`\begin{gathered} 12\text{months}-\longrightarrow\text{ 1yr} \\ 10\text{months}-\longrightarrow x \\ x=(10)/(12)=(5)/(6) \end{gathered}`

Rate = 9.5% = 0.095

Recall the formula, Finding Simple Interest,

`\begin{gathered} I=\frac{\text{PRT}}{100} \\ I=(10200*0.095*(5)/(6))/(100) \\ I=807.5 \end{gathered}`

Recall the formula, Finding Maturity Value,

Maturity Value = Principal + Interest

`\begin{gathered} M=P+I \\ M=10200+807.5 \\ M=11007.5 \end{gathered}`

Therefore the maturity value = $11007.5