Calculate the simple interest and maturity value.
Principle $16,000
Interest Rate 4%
Time 18 mnths
To calculate the simple interest, you can use the formula:
Simple Interest = (Principle × Interest Rate × Time) / 100
Let's substitute the values given:
Principle = $16,000
Interest Rate = 4%
Time = 18 months
Simple Interest = (16,000 × 4 × 18) / 100
Simplifying the equation:
Simple Interest = (64,000 × 18) / 100
Simple Interest = 1,152,000 / 100
Simple Interest = $11,520
To calculate the maturity value, we need to add the principle and the simple interest:
Maturity Value = Principle + Simple Interest
Maturity Value = $16,000 + $11,520
Maturity Value = $27,520
Therefore, the simple interest is $11,520 and the maturity value is $27,520.
To calculate the simple interest and maturity value, we will use the formula:
Simple Interest = (Principle * Interest Rate * Time) / 100
Maturity Value = Principle + Simple Interest
Given:
Principle = $16,000
Interest Rate = 4%
Time = 18 months
Step 1: Convert the interest rate to decimal form
Interest Rate = 4% = 4/100 = 0.04
Step 2: Calculate the simple interest
Simple Interest = (Principle * Interest Rate * Time) / 100
= ($16,000 * 0.04 * 18) / 100
= ($11,520) / 100
= $640
Step 3: Calculate the maturity value
Maturity Value = Principle + Simple Interest
= $16,000 + $640
= $16,640
Therefore, the simple interest is $640 and the maturity value is $16,640.