To calculate the maturity value of an interest-bearing note, you need to first calculate the interest and then add it to the principal amount.

Here's how you do it:

Step 1: Calculate the interest. The formula for calculating ordinary interest (also known as simple interest) is:

Interest = Principal x Rate x Time

In this case, the principal is $150,000, the rate is 4.3% (or 0.043 when expressed as a decimal), and the time is 90 days. However, since the rate is usually expressed on an annual basis, you need to adjust the time to reflect a portion of the year. In ordinary interest calculations, the year is considered to have 360 days. So, 90 days is 90/360 = 0.25 of a year.

So, the interest is:

Interest = $150,000 x 0.043 x 0.25 = $1,612.50

Step 2: Add the interest to the principal to get the maturity value.

Maturity Value = Principal + Interest

Maturity Value = $150,000 + $1,612.50 = $151,612.50

So, the maturity value of the note is $151,612.50.

Question

To calculate the maturity value of an interest-bearing note, you need to first calculate the interest and then add it to the principal amount.

Here's how you do it:

Step 1: Calculate the interest. The formula for calculating ordinary interest (also known as simple interest) is:

Interest = Principal x Rate x Time

In this case, the principal is $150,000, the rate is 4.3% (or 0.043 when expressed as a decimal), and the time is 90 days. However, since the rate is usually expressed on an annual basis, you need to adjust the time to reflect a portion of the year. In ordinary interest calculations, the year is considered to have 360 days. So, 90 days is 90/360 = 0.25 of a year.

So, the interest is:

Interest = $150,000 x 0.043 x 0.25 = $1,612.50

Step 2: Add the interest to the principal to get the maturity value.

Maturity Value = Principal + Interest

Maturity Value = $150,000 + $1,612.50 = $151,612.50

So, the maturity value of the note is $151,612.50.

Knowee AI · Accepted Answer

To calculate the maturity value of an interest-bearing note, you need to first calculate the interest and then add it to the principal amount.

Here's how you do it:

Step 1: Calculate the interest. The formula for calculating ordinary interest (also known as simple interest) is:

Interest = Principal x Rate x Time

In this case, the principal is $150,000, the rate is 4.3% (or 0.043 when expressed as a decimal), and the time is 90 days. However, since the rate is usually expressed on an annual basis, you need to adjust the time to reflect a portion of the year. In ordinary interest calculations, the year is considered to have 360 days. So, 90 days is 90/360 = 0.25 of a year.

So, the interest is:

Interest = $150,000 x 0.043 x 0.25 = $1,612.50

Step 2: Add the interest to the principal to get the maturity value.

Maturity Value = Principal + Interest

Maturity Value = $150,000 + $1,612.50 = $151,612.50

So, the maturity value of the note is $151,612.50.

The maturity value of a $150,000, 4.3%, 90-day interest-bearing note using ordinary interest is:Multiple Choice$151,612.50$150,000.00$156,450.00$154,332.75$1,612.50

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