What is the maturity value of a 3-month, 10% note for $40,000?
A)$42,000
B)$44,000
C)$41,000
D)$40,000

Question

Quizplus · Accepted Answer

The maturity value of the note can be calculated as follows:
Maturity value = Principal + (Principal x rate x time)
Here, the principal is $40,000, the rate is 10% (or 0.1 as a decimal), and the time is 3 months (or 0.25 as a fraction, since there are 3 months in a quarter).
Maturity value = $40,000 + ($40,000 x 0.1 x 0.25)
Maturity value = $40,000 + $1,000
Maturity value = $41,000
Therefore, the correct answer is C.

What Is the Maturity Value of a 3-Month, 10% Note