On August 14, Park Avenue Bank lent $240,000 to City Coffee Shop on a 75 day, 2% note. What is the maturity value of the note? (Use a 360-day year and round answers to the nearest dollar.)

Question

Quizplus · Accepted Answer

To find the maturity value, we need to add the interest to the principal amount. The interest can be calculated using the following formula:

interest = principal * rate * time

Here, the principal is $240,000, the rate is 2%, and the time is 75/360 years (using a 360-day year). Plugging in these values, we get:

interest = 240,000 * 0.02 * (75/360) = 1,000

So the maturity value is:

maturity value = principal + interest = 240,000 + 1,000 = $241,000

Therefore, the correct answer is choice B.

On August 14, Park Avenue Bank Lent $240,000 to City