Trust Worthy Bank accepts a promissory note for $6,000 from a customer on November 1,to be repaid in eight months plus 6% interest.The maturity value of the note is:
A)$6,240.
B)$6,140.
C)$6,075.
D)$6,000.

Question

Quizplus · Accepted Answer

To calculate the maturity value of the note, we need to add the interest to the principal amount.

The interest on the note is calculated as:

$6,000 x 6% x (8/12) = $240

The term of the note is eight months, but the interest is calculated based on the annual rate of 6%. Therefore, we need to divide the interest rate by 12 and multiply by 8 to get the interest for eight months.

Adding the interest to the principal amount gives us the maturity value:

$6,000 + $240 = $6,240

Therefore, the correct answer is A) $6,240.

Trust Worthy Bank Accepts a Promissory Note for $6,000 from a Customer