Magick, Inc. converted a $5,000 account receivable from Ronaldo to a 75-day, 7% note receivable. The maturity value (assume a 360-day year)that will be due from Ronaldo in 75 days is: (Do not round any intermediary calculations. Round your final answer to the nearest cent.)

Question

Quizplus · Accepted Answer

The maturity value of the note receivable can be calculated using the formula: Maturity Value = Principal + Interest, where Interest = Principal × Rate × Time. Given a principal of $5,000, an annual interest rate of 7%, and a time period of 75 days in a 360-day year, the interest can be calculated as follows: Interest = $5,000 × 7% × (75/360) = $5,000 × 0.07 × 0.2083 = $72.92. Therefore, the maturity value is $5,000 + $72.92 = $5,072.92, which rounds to $5,073.