Question

On August​ 14, Park Avenue Bank lent​ $210,000 to City Coffee Shop on a 75​ day, 4% note. What is the maturity value of the​ note? ​ (Use a 365minusday year. Do not round intermediate​ calculations, and round your final answer to the nearest​ dollar.)
A. $218,400
B. $211,726
C. $211,750
D. $210,000

Answer 1

Answer:

B

Explanation:

Interest - (principal x time x rate) divided by 100

where time is  expressed in days relative to 365 days in a year and rate expressed as percentage. Principal is the sum lent out

Interest = 210,000 x 75 x 4

                    100 x 365

               = $ 1 726

add the interest to the principal to get the maturity value = 1 726 + 210,000= $211,726