find the marturity value of the loan of $2,300.00 after three years. the loan carries a simple interest rate of 7.3% per year.
I came up with $503.70 but not sure if that's right
How can the maturity value be less than the amount loaned?
i took $2,300.00x7.3%x3 and that's what i came up with?
That's the total interest. It is not the maturity value of the loan.
http://financial-dictionary.thefreedictionary.com/maturity+value
I m still not understanding it im supposed to divide it or x it??
Ok.
Let's suppose you loan a friend $2,300 at an interest rate of 7.3% a year.
How much will your friend pay you back after three years?
if i divide it i come up with 94,520.547945204
Be real. Think!
ok if i go 2,300 plus 7.3% i come up with 2,467.9 now is that 2,467.90 or just 2,467.9
You're getting closer.
You've already figured the interest. Add the interest to the principal. What do you get?
2,300 plus 2,467.9 i get 4,767.9 but it ifs 90 than it would be 4,767.90 but i dunno is that 9 0r 90 at the end
You already posted the total interest.
I came up with $503.70 but not sure if that's right
Add that to the principal.
2,803.70
Yay! You got it! :-)
thank you for all your help now how do i go about finding interest rate
You are very welcome.
You can find the interest rate by using this formula.
Interest = principal * rate * time (in years)
its in months 7 so do i do 12 for a year
if i do it for 12 453,264 so it would be for a year it is 700 borrowed for 7 months paid interest 53.96
so i think it will be 45%
For 7 months, use the fraction of the year.
7/12 = 0.583
What is the principal? What is the interest?
the principle is $700 and the paid $53.96 in interest
I = PRT
53.96 = 700 * R * 0.583
53.96 = 408.1 * R
53.86 / 408.1 = R
0.13197 = R
The interest rate is 13.2%