Chapter 10.I, Problem 24RE

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

Chapter
Section

Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

Find the maturity value of the following loans. Use MV = p (1 + RT) to find the maturity values.Principal Rate (%) Time Maturity Value $18,620 10 1 2 30 months _____________ To determine To calculate: The maturity value of an amount$18,620 issued at a rate of interest 10.5% over a period of 30 months.

Explanation

Given Information:

The principle amount is $18,620, rate of interest is 10.5% over a period of 30 months. Formula used: The maturity value of the loan is given by the formula; MV=P(1+RT) Here P is the principal amount, R is rate of interest and T is the time-period. Calculation: Consider the principal amount$18,620 at a rate of interest 1012% for the time-period of 30 months.

So,

P=\$18,620R=212%

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