Jim Hindson’s bank granted him a single-payment loan of $3,400 for 144 days at an annual interest rate of 18%. His bank charges ordinary interest. What is the maturity value?
Group of answer choices
$3,644.80
$3,424.48
$3,424.14
$3,641.45
The maturity value can be calculated using the formula:
Maturity Value = Principal + (Principal * Interest Rate * Time)
Where:
Principal = $3,400
Interest Rate = 18% (0.18 as a decimal)
Time = 144 days
Maturity Value = $3,400 + ($3,400 * 0.18 * (144/365))
Maturity Value = $3,400 + ($3,400 * 0.18 * 0.3945)
Maturity Value = $3,400 + $230.96
Maturity Value = $3,630.96
Therefore, the maturity value is $3,630.96.
None of the given options match the correct answer.