Calculate the maturity value of the simple interest loan. (Round your answer to two decimal places.)P = $15,000, r = 8.3%, t = 8 months
Question
Calculate the maturity value of the simple interest loan. (Round your answer to two decimal places.)P = $15,000, r = 8.3%, t = 8 months
Solution
To calculate the maturity value of a simple interest loan, you can use the formula:
I = P * r * t
where:
- I is the interest,
- P is the principal amount (the initial amount of money),
- r is the annual interest rate (in decimal form), and
- t is the time the money is invested or borrowed for, in years.
Given: P = $15,000 r = 8.3% = 0.083 (you get this by dividing 8.3 by 100) t = 8 months = 8/12 years = 0.67 years (you get this by dividing 8 by 12)
First, calculate the interest: I = P * r * t I = 834.45
The maturity value of the loan is the sum of the principal amount and the interest. So,
Maturity Value = P + I Maturity Value = 834.45 Maturity Value = $15,834.45
So, the maturity value of the loan is $15,834.45.
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