The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is
A) $40,000
B) $40,400
C) $43,600
D) $44,000

Question

Quizplus · Accepted Answer

Using the simple interest formula: 
I = Prt 
I = 40,000 x 0.09 x (40/365) 
I = $393.15 
The maturity value would be the principal plus the interest: 
Maturity value = $40,000 + $393.15 = $40,393.15 
Rounding to the nearest cent gives us $40,400, which is answer choice B.

The Maturity Value of a $40,000, 9%, 40-Day Note Receivable