The maturity value of a $6,000, 9%, 60-day note receivable dated February 10th is

Question

Quizplus · Accepted Answer

The formula for interest on a note receivable is:

Interest = Principal x Rate x Time

Where:
- Principal is the amount of the note ($6,000 in this case)
- Rate is the interest rate (9%)
- Time is the time period in terms of a fraction of a year (60 days divided by 365 days, which is approximately 0.1644)

So, to calculate the interest:

Interest = $6,000 x 0.09 x 0.1644 = $88.92

To find the maturity value, we add the interest to the principal:

Maturity value = $6,000 + $88.92 = $6,088.92

However, we need to round this to the nearest dollar (as specified in the question), which gives us the answer:

Maturity value = $6,090 (A)

The Maturity Value of a $6,000, 9%, 60-Day Note Receivable