The maturity value of a $40,000 note at 11% for 5 months is (round to nearest dollar):

Question

Quizplus · Accepted Answer

The formula to calculate maturity value is:

Maturity value = principal + (principal x rate x time)

Here, 
Principal = $40,000 
Rate = 11% = 0.11 (in decimal)
Time = 5 months

Plugging in the values, we get:

Maturity value = $40,000 + ($40,000 x 0.11 x (5/12)) 
Maturity value = $40,000 + $1,833.33 
Maturity value = $41,833.33

Rounding to the nearest dollar, we get the answer as $41,833. Therefore, the best choice is A.

The Maturity Value of a $40,000 Note at 11% for 5