MATH SOLVE

5 months ago

Q:
# What are the amounts of interest and maturity value of a loan for 150,000 at 6 1/2% simple interest for 3 years?

Accepted Solution

A:

The formula for computing the amount of simple interest is:
I = Prt
Where P = principal amount of the loan
r = interest
rate of the loan
t =
duration of the loan
Substituting the amounts in the formula,
I = (150,000) (6.5%) (3)
= 29,250
To compute for the maturity value, you have to add the
interest to the principal amount:
Maturity value = 150,000 + 29,250 = 179,250