The maturity value of a 12%, 60-day note for $5,000 is $5,100. (Assume 360 days in a year)

Question

Quizplus · Accepted Answer

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

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

In this case, the principal is $5,000, the rate is 12%, and the time is 60/360 (since there are 360 days in a year).

So the maturity value would be:

Maturity Value = $5,000 + ($5,000 x 0.12 x 0.16667)

Maturity Value = $5,000 + $100

Maturity Value = $5,100

Therefore, the statement is true.

The Maturity Value of a 12%, 60-Day Note for $5,000