Question

carrie Houghtalings bank granted her a single-paymenr loan of $4000 for 80 days at 11 percent ordinary interest. what is the maturity value of the loan​

Answer 1

Maturity Value of the loan is $4096.44

Explanation:

Step 1 :

Formula for ordinary interest = p*n*r/100

where p = principal, n = number of years and r = rate of interest.

Step 2 :

Given p = $4000 , n = 80 days = 80/365 year , r = 11%

Therefore interest = p*n*r/100 = (4000*80*11)/(365*100) = $96.44

Ordinary interest = $96.44

Step 3 :

Maturity Value = principal + interest = 4000 +96.44 = $4096.44