A promissory note has a face value of $5175.00 and it has a date of issue of April 2 this year. The term is for 5 months. The rate of interest is 6.75%. What is the maturity value of the note?
A) $5324.30
B) $5234.30
C) $5342.30
D) $5334.20
E) $5444.30

Question

Quizplus · Accepted Answer

The maturity value of the note is calculated by adding the interest to the face value. Interest = Principal × Rate × Time = $5175 × 6.75% × (5/12) = $149.30. Maturity value = Face value + Interest = $5175 + $149.30 = $5324.30.

A Promissory Note Has a Face Value of $5175