Problema Solution
What is the maturity value on a loan for $120,740, if the interest rate is 11 3/4% and the loan term is 7 months?
Answer provided by our tutors
interest = principal * rate * time
we have time = 7/12 years
11 3/4% is represented as a decimal by 0.1175
interest = 120740 * 0.1175 * 7/12 = 8275.72
120740 + 8275.72 = 129015.72
the maturity value of the loan is $129,015.72