The maturity value of a 180-day note for $8,000 that bears interest at 10 percent is (Assume 360 days in a year.)
A)$8,800.
B)$8,400.
C)$8,000.
D)$7,600.

Question

Quizplus · Accepted Answer

The formula for simple interest is:
Interest = Principal x Rate x Time
Since the note is for 180 days, which is half a year, the time in the formula is 0.5. We can plug in the given values:
Interest = $8,000 x 0.10 x 0.5 = $400
The maturity value is the sum of the principal and the interest:
Maturity value = $8,000 + $400 = $8,400. Therefore, the answer is B.

The Maturity Value of a 180-Day Note for $8,000 That