What is the maturity value of the following loan? Use MV = P(1 + RT) to find the maturity.
Principal
Rate (%)
Time
Maturity Value
$120,740
11¾ %
7 months
(Points : 3)
so, what's the trouble? Just plug in the numbers.
MV = 120740(1+.1175/12 * 7)
To find the maturity value of the loan, we can use the formula MV = P(1 + RT), where MV represents the maturity value, P represents the principal amount, R represents the rate as a decimal, and T represents the time in years.
In this case, we are given the following information:
Principal (P) = $120,740
Rate (R) = 11¾ %, which can also be written as 11.75% or 0.1175 (as a decimal)
Time (T) = 7 months, which can be written as 7/12 years (since there are 12 months in a year)
Now we can substitute these values into the formula and calculate the maturity value.
MV = $120,740 * (1 + 0.1175 * (7/12))
MV = $120,740 * (1 + 0.06869)
MV = $120,740 * 1.06869
Calculating this, we find that the maturity value of the loan is approximately $128,969.36.
Therefore, the maturity value of the loan is $128,969.36.