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19 October, 02:04

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

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Answers (1)
  1. 19 October, 05:16
    0
    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
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