Find the maturity value on a loan of 10,500 @ 8 1/2% interest for 18 years using the MV=P+I
To find the maturity value on a loan, we need to use the formula MV = P + I, where MV is the maturity value, P is the principal amount (loan amount), and I is the interest.
In this case, the principal amount (P) is $10,500 and the interest rate is 8 1/2% per year. To calculate the interest (I), we multiply the principal amount by the interest rate. However, the interest rate needs to be converted to a decimal first:
8 1/2% = 8.5/100 = 0.085
So, the interest (I) is calculated as follows:
I = P * Interest Rate
I = $10,500 * 0.085
Now, we can calculate the maturity value (MV) by adding the principal amount (P) and the interest (I):
MV = P + I
MV = $10,500 + ($10,500 * 0.085)
Calculate the interest:
I = $10,500 * 0.085
I = $892.5
Now, calculate the maturity value:
MV = $10,500 + $892.5
MV = $11,392.5
Therefore, the maturity value on the loan of $10,500 at 8 1/2% interest for 18 years is $11,392.5.