Question

Marcus Dobson wants to purchase new computers for his office staff. The bank grants him a single payment loan of $22000 for 182 days at 7.75% exact interest. what is the maturity value of the loan?

Answer 1

For this, first find the exact interest

`\begin{gathered} \text{ Exact Interest = Principal }*\text{ Rate }*\text{ Time }/365 \\ \text{ Then you have} \\ \text{Exact Interest }=22000*7.75\text{ \%}*\text{ 182 }/365 \\ 7.75\text{ \% }=0.0775,\text{ so} \\ \text{Exact Interest }=22000*0.0775*\text{ 182 }/365 \\ \text{Exact Interest }=\text{ \$}850.16 \end{gathered}`

Now find the maturity value

`\begin{gathered} \text{Maturity Value = Principal }+\text{ Interest owed} \\ \text{Maturity Value }=22000\text{ }+\text{ }850.16 \\ \text{Maturity Value }=\text{ \$}22850.16 \end{gathered}`

Therefore, the maturity value of the loan is $22850.16.