what is the maturity value of the following loans using MV=P(1+RT to find the maturity values,$120,740 principal, 11 3/4 rate, 7months for time
MV=P(1+RT
MV = 120,740 * (1 + 0.1175 * 0.58333)
To find the maturity value, we need to understand the formula MV = P(1 + RT), where:
MV represents the maturity value,
P is the principal amount,
R is the interest rate, and
T is the time period.
In this case, you have the following information:
Principal (P) = $120,740
Rate (R) = 11 3/4% = 0.1175 (decimal value)
Time (T) = 7 months
To calculate the maturity value, we can plug these values into the formula:
MV = P(1 + RT)
MV = $120,740(1 + 0.1175 * 7/12)
To calculate the multiplication part first:
0.1175 * 7/12 = 0.0682291667 (approximately)
MV = $120,740(1 + 0.0682291667)
Now, calculate the addition part:
1 + 0.0682291667 = 1.0682291667 (approximately)
Finally, multiply the principal by the sum we obtained to get the maturity value:
MV = $120,740 * 1.0682291667
Therefore, the maturity value of the loan with a principal amount of $120,740, a rate of 11 3/4%, and a time period of 7 months is approximately $128,167.22.