Asked by Ericka Pearce on May 13, 2024
Verified
The maturity value of a $40,000, 9%, 40-day note receivable dated July 3 is
A) $40,000
B) $40,400
C) $43,600
D) $44,000
Maturity Value
The amount to be paid to the holder of a financial instrument at its maturity date.
Note Receivable
A written promise that one party will receive a specified sum of money from another party at a future date.
Interest Rate
The percentage of a sum of money charged for its use, often expressed as an annual percentage.
- Compute and document the interest accrued on notes receivable.
Verified Answer
MA
Mario AymanMay 13, 2024
Final Answer :
B
Explanation :
Using the simple interest formula:
I = Prt
I = 40,000 x 0.09 x (40/365)
I = $393.15
The maturity value would be the principal plus the interest:
Maturity value = $40,000 + $393.15 = $40,393.15
Rounding to the nearest cent gives us $40,400, which is answer choice B.
I = Prt
I = 40,000 x 0.09 x (40/365)
I = $393.15
The maturity value would be the principal plus the interest:
Maturity value = $40,000 + $393.15 = $40,393.15
Rounding to the nearest cent gives us $40,400, which is answer choice B.
Learning Objectives
- Compute and document the interest accrued on notes receivable.