You borrowed GHS 2500 from your friend to pay your school fees on a promise you will pay the principle amount and 15% interest in two years. What is the maturity value if interest in estimated every six months?

To calculate the maturity value, we first need to understand that the interest is compounded semi-annually. This means that the interest is calculated every six months and added to the principal amount.

Here are the steps to calculate the maturity value:

1. Identify the principal amount, which is GHS 2500.
2. Identify the annual interest rate, which is 15% or 0.15 in decimal form.
3. Since the interest is compounded semi-annually, divide the annual interest rate by 2 to get the semi-annual interest rate. So, 0.15/2 = 0.075.
4. The number of compounding periods is 2 years * 2 (since it's compounded semi-annually) = 4.
5. Use the formula for compound interest to calculate the maturity value: A = P (1 + r/n)^(nt), where:
   • A is the amount of money accumulated after n years, including interest.
   • P is the principal amount (the initial amount of money).
   • r is the annual interest rate (in decimal).
   • n is the number of times that interest is compounded per year.
   • t is the time the money is invested for in years.
6. Substitute the values into the formula: A = 2500 (1 + 0.075/2)^(2*2).
7. Calculate the value inside the bracket: 1 + 0.075 = 1.075.
8. Raise 1.075 to the power of 4 to get: 1.075^4 = 1.3160740125.
9. Multiply this value by the principal amount: 2500 * 1.3160740125 = GHS 3290.19.

So, the maturity value of the loan after 2 years, with interest compounded semi-annually, is approximately GHS 3290.19.