The maturity value of a $12,000 face value, 180-day note bearing interest at 10 percent is (Assume 360 days in a year.)
A)$600.
B)$12,600.
C)$1,200.
D)$13,200.

Question

Quizplus · Accepted Answer

The maturity value of the note is calculated by adding the face value of the note to the interest earned over the period. Interest = Principal × Rate × Time = $12,000 × 10% × (180/360) = $600. Therefore, the maturity value = $12,000 (face value) + $600 (interest) = $12,600.

The Maturity Value of a $12,000 Face Value, 180-Day Note