The maturity value of a $20,000, 6%, 4-month note receivable dated July 3, with interest due at maturity, is
A)$400.
B)$20,000.
C)$20,400.
D)$21,200.

Question

Quizplus · Accepted Answer

The maturity value of the note is calculated by adding the principal amount ($20,000) to the interest earned over the 4-month period. The interest can be calculated as follows: Interest = Principal × Rate × Time = $20,000 × 6% × (4/12) = $400. Therefore, the maturity value is $20,000 (principal) + $400 (interest) = $20,400.

The Maturity Value of a $20,000, 6%, 4-Month Note Receivable