   Chapter 10.I, Problem 4TIE ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

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

# a. What is the amount of interest and the maturity value of a loan for $15,400 at 6 1 2 % simple interest for 24 months? ( Use the formula M V = P + I . ) b. Apollo Air Taxi Service borrowed$450,000 at 8 % simple interest for 9 months to purchase new airplane. Use the formula M V   =   P   ( 1   +   R T ) to find the maturity value of the loan.

(a)

To determine

To calculate: The amount of interest and maturity value of a loan, if the principal is $15400, the simple interest rate is 612% and the time is 24 months. Explanation Given Information: The principal is$15400, the simple interest rate is 612% and the time is 24 months.

Formula used:

The simple interest formula is,

Interest=Principle×Rate×Time

Or,

I=P×R×T

Where, I is interest, P is principal, R is rate of interest and T is the time in years.

The maturity value is,

Maturity Value=Principle+Interest

Or,

MV=P+I

Calculation:

Consider the provided information,

The principal is $15400, the simple interest rate is 612% and the time is 24 months (b) To determine To calculate: The maturity value of the loan, if Apollo Air Taxi Service borrowed$450000 at a simple interest of 8% for 9 months.

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