Question

Tao Bergolts bank granted him a single-payment loan of $4,400 at an interest rate of 12 percent. The term of the loan is 172 days. What is the maturity value of his loan at exact interest?

Answer 1

Answer: $ 14736 (approx)

Step-by-step explanation:

Since,  Maturity value is the amount payable to an investor at the end of a holding period of debt instrument.

And, It is defined as, $V= P(1+r)^n$

Where, P is the principal amount,

r is the interest rate

And, n is the time period.

Here, P=  $4,400 r=  12 % and n = 172/365

Thus, Maturity value for this loan,

$V = 4400(1+12)^{172/365}$

⇒V= 4400 × 3.34908932078 = 14735.9930114 ≈ 14736