What is the maturity value of a 3-month,12% bill for $50,000?
A)$51,500
B)$56,000
C)$50,000
D)$52,000

Question

Quizplus · Accepted Answer

The maturity value of the bill can be calculated using the following formula:

Maturity value = Face value * (1 + (rate * time))

Here, the face value (or principal) of the bill is $50,000, the rate of interest is 12% per annum, and the time period is 3 months (or 0.25 years).

Substituting these values in the formula, we get:

Maturity value = $50,000 * (1 + (0.12 * 0.25)) = $51,500

Therefore, the correct answer is (A) $51,500.

What Is the Maturity Value of a 3-Month,12% Bill for $50,000