Find the interest and maturity value for the loan. Round to the nearest cent.
-$19,480 at 10% for 2.7 years
A)$5,064.80; $24,544.80
B)$2,768.21; $22,248.21
C)$5,259.60; $24,739.60
D)$7,207.60; $26,687.60

Question

Quizplus · Accepted Answer

To find the interest, we use the formula I = P*r*t, where P is the principal, r is the rate as a decimal, and t is the time in years. Plugging in the given values, we get:

I = 19480*0.1*2.7 = 5259.60

To find the maturity value, we add the interest to the principal:

M = 19480 + 5259.60 = 24739.60

Rounding to the nearest cent gives us $24,739.60, which is answer choice C. To begin, we can use the simple interest formula:

Interest = Principal x Rate x Time

In this case, our principal is $19,480, our rate is 10%, and our time is 2.7 years. Substituting these values, we get:

Interest = $19,480 x 0.10 x 2.7 
Interest = $5,259.60

Therefore, our interest is $5,259.60.

To find the maturity value, we simply add the interest to the principal:

Maturity Value = Principal + Interest 
Maturity Value = $19,480 + $5,259.60 
Maturity Value = $24,739.60

Therefore, our final answer is C: $5,259.60 in interest and a maturity value of $24,739.60.

Find the Interest and Maturity Value for the Loan