Find the maturity value on a loan of $2,500 at 10.5% interest, for 60 months. Use the formula MV = P + I.
A) $1,312.50
B) $3,812.50
C) $4,375.00
D) $1,875.00

Question

Quizplus · Accepted Answer

The maturity value (MV) is calculated by adding the principal (P) to the interest (I). The interest can be calculated as I = PRT, where P is the principal ($2,500), R is the annual interest rate (10.5% or 0.105), and T is the time in years (60 months or 5 years). So, I = $2,500 * 0.105 * 5 = $1,312.50. Adding this to the principal gives MV = $2,500 + $1,312.50 = $3,812.50.

Find the Maturity Value on a Loan of $2,500 at 10.5