A company accepts a 60-day, 10 percent, $900 note in settlement of an account. Assume a 360-day year. Which of the following is the maturity value of the note?
A) $915
B) $900
C) $990
D) $15

Question

Quizplus · Accepted Answer

First, we need to calculate the interest on the note:
Interest = Principal x Rate x Time
Time = 60/360 (since we are assuming a 360-day year)
Time = 1/6
Interest = $900 x 0.1 x 1/6
Interest = $15

The maturity value of the note is the sum of the principal and interest:
Maturity value = Principal + Interest
Maturity value = $900 + $15
Maturity value = $915

Therefore, the correct answer is A) $915.

A Company Accepts a 60-Day, 10 Percent, $900 Note in Settlement