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Calculate the maturity value of the simple interest loan. (Round your answer to two decimal places.)P = $15,000, r = 8.3%, t = 8 months

Question

Calculate the maturity value of the simple interest loan.

  • Principal (P) = $15,000
  • Rate (r) = 8.3%
  • Time (t) = 8 months

(Round your answer to two decimal places.)

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Solution

To calculate the maturity value of a simple interest loan, you can use the formula:

I = P * r * t

where:

  • I is the interest,
  • P is the principal amount (the initial amount of money),
  • r is the annual interest rate (in decimal form), and
  • t is the time the money is invested or borrowed for, in years.

Given: P = $15,000 r = 8.3% = 0.083 (you get this by dividing 8.3 by 100) t = 8 months = 8/12 years = 0.67 years (you get this by dividing 8 by 12)

First, calculate the interest: I = P * r * t I = 15,0000.0830.67I=15,000 * 0.083 * 0.67 I = 834.45

The maturity value of the loan is the sum of the principal amount and the interest. So,

Maturity Value = P + I Maturity Value = 15,000+15,000 + 834.45 Maturity Value = $15,834.45

So, the maturity value of the loan is $15,834.45.

This problem has been solved

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