Question

A 60-day note for $5,000 with an interest rate of 12 percent per annum will have a maturity value of _____________. (Assume that there are 360 days in a year for the purpose of calculating the interest.)

Answer 1

The maturity value of a 60-day note with a principal of $5,000 and an interest rate of 12% per annum is $5,100.

Step-by-step explanation:

To calculate the maturity value of a 60-day note with a principal of $5,000 and an interest rate of 12% per annum, we can use the formula:

Maturity Value = Principal + (Principal x Rate x Time)

Given that the time is 60 days and there are 360 days in a year, we can convert the time to years by dividing it by 360:

Time = 60/360 = 1/6 year

Plugging in the values, we have:

Maturity Value = $5,000 + ($5,000 x 0.12 x 1/6) = $5,000 + $100 = $5,100