Using a 360-day year,the maturity value of a 60-day note for $1,500 at 7% annual interest is (rounded to the nearest cent):

Question

Quizplus · Accepted Answer

Using the formula for simple interest:

Interest = Principal x Rate x Time

Since the annual interest rate is 7%, the daily interest rate would be:

7% / 360 = 0.0194%

Therefore, the interest on a 60-day note would be:

Interest = $1,500 x 0.0194% x 60 = $17.55 (rounded to the nearest cent)

The maturity value of the note would be the sum of the principal and the interest:

Maturity Value = $1,500 + $17.55 = $1,517.55

Rounding this to the nearest cent, we get:

Maturity Value = $1,517.50

Therefore, the best choice is C.

Using a 360-Day Year,the Maturity Value of a 60-Day Note