Calculate the simple interest and maturity valve for the following problems. Round to the nearest cent as needed. 18,000,4 1/2%,18mo.
18,000 * 0.045 = ?
18,000 * 0.045 * 0.5 = ?
Add the two products together for the total interest.
simple.inteterest
To calculate the simple interest and maturity value for the given problem, we will use the following formulas:
Simple Interest = (Principal * Rate * Time) / 100
Maturity Value = Principal + Simple Interest
Given information:
Principal (P) = $18,000
Rate (R) = 4 1/2% = 4.5%
Time (T) = 18 months
Step 1: Convert the rate to decimal form
4 1/2% is equivalent to 4.5/100 = 0.045
Step 2: Calculate the Simple Interest
Simple Interest = (P * R * T) / 100
Simple Interest = (18,000 * 0.045 * 18) / 100
Let's calculate the simple interest:
Simple Interest = (18,000 * 0.045 * 18) / 100
Simple Interest = 3,870
So, the simple interest is $3,870.
Step 3: Calculate the Maturity Value
Maturity Value = Principal + Simple Interest
Maturity Value = 18,000 + 3,870
Let's calculate the maturity value:
Maturity Value = 18,000 + 3,870
Maturity Value = 21,870
So, the maturity value is $21,870.
Therefore, the simple interest is $3,870, and the maturity value is $21,870.