The maturity value of a $5,000,10%,9-month note is:
A)$375.
B)$5,000.
C)$5,375.
D)$4,625.

Question

Quizplus · Accepted Answer

The maturity value of the note can be calculated using the formula:

Maturity value = principal + (principal x rate x time)

Where:
- Principal = $5,000
- Rate = 10% or 0.10 (since it is expressed as a percentage)
- Time = 9 months or 9/12 years (since the rate is annual)

Substituting the values:

Maturity value = $5,000 + ($5,000 x 0.10 x 9/12)
Maturity value = $5,000 + $375
Maturity value = $5,375

Therefore, the maturity value of the note is $5,375.

The Maturity Value of a $5,000,10%,9-Month Note Is