Answer the question about the promissory note given.
------------------------Promissory Note------------------------ March 12
Ninety days after date above, I promise to pay to the order of Thomas Ronney $780 dollars and no
Cents with interest at 11% per year, payable at Nations Bank Abercorn Branch.
Due: June 10 Signed: Fred Nester
--------------------------------------------------------------
What is the maturity value of the note?
A)$865.80
B)11% per year
C)$780 and no cents
D)$801.45

Question

Quizplus · Accepted Answer

The maturity value of the note is calculated by adding the principal ($780) and the interest ($21.45). The interest is calculated as follows: 
$780 x 11% x 90/360 = $21.45 
Therefore, the maturity value is $801.45. To find the maturity value, we have to calculate the interest accrued on $780 at a rate of 11% per annum for 90 days (3 months). The formula for calculating simple interest is I = PRT, where I is the interest, P is the principal or amount borrowed, R is the rate of interest per year, and T is the time in years. Here, P = $780, R = 11% per annum, T = 3/12 = 0.25 years. Therefore, I = 780*0.11*0.25 = $21.45. The maturity value is the sum of the principal and interest, i.e., $780 + $21.45 = $801.45. Therefore, the correct answer is D.

Answer the Question About the Promissory Note Given