asked 143k views
3 votes
The maturity value of a 5-year, 6.25% ordinary interest commercial loan is $361,593.75. Find the principal.

asked
User Adigioia
by
7.5k points

1 Answer

5 votes
The principle will be calculated as follows:
FV=P(1+r/100)^n
P=361,593.75
r=6.25%
n=5 years
plugging the values in the formula and solving for P we shall have:
361,593.75=P(1+6.25/100)^5
361,593.75=P*1.0625^5
P=267,039.94
thus the value of the principle was $267,037.94

answered
User Alan Bowen
by
8.4k points
Welcome to Qamnty — a place to ask, share, and grow together. Join our community and get real answers from real people.