The maturity value of a 90-day note for $4,000 that bears interest at 10 percent a year is
A) $4,400.
B) $4,100.
C) $4,000.
D) $3,900.

Question

Quizplus · Accepted Answer

To calculate the maturity value of the note, we need to first find the interest earned for 90 days:

Interest = Principal x Rate x Time
Interest = $4,000 x 0.10 x (90/360) (since there are 360 days in a year)

Interest = $100

So the total amount due at maturity (maturity value) is the sum of the principal and the interest earned:

Maturity Value = Principal + Interest
Maturity Value = $4,000 + $100
Maturity Value = $4,100

Therefore, the correct answer is B.

The Maturity Value of a 90-Day Note for $4,000 That