Question

Dana Thacker's bank granted her single payment loan of 10,450 she agreed to repay the loan in 75 days at an exact interest rate of 8.25 percent. What is the maturity value of the loan? Need help ASAP

Answer 1

Using simple interest, it is found that the maturity value of the loan is of 10,638.

Simple Interest

The amount of money after t years in simple interest is modeled by:

$A(t) = A(0)(1 + rt)$

In which:

• A(0) is the initial amount.

• r is the interest rate, as a decimal.

In this problem:

• A loan of 10450 is taken, hence $A(0) = 10450$.

• Interest rate of 8.25%, hence $r = 0.0825$

• The loan will be repaid in 75 days, considering the time in years, $t = \frac{75}{365}$

Then, the maturity value of the loan is:

$A(t) = A(0)(1 + rt)$

$A\left(\frac{75}{365}\right) = 10450\left[1 + 0.0875\frac{75}{365}\right] = 10638$

The maturity value of the loan is of 10,638.

To learn more about simple interest, you can take a look at brainly.com/question/26207710