Find the Maturity Value of the Loan (Use the Formula

question 89

Short Answer

Find the maturity value of the loan (use the formula MV = P(1+ RT) to find the maturity value): $$\begin{array} { l l l l } \text { Principal } & \text { Rate } & \text { Time } & \text { Maturity Value } \\\$ 10,900 & 8 \% & 3 \text { years } &\end{array}$$

---

Definitions:

Interest-Bearing Note

A note that has a maturity value greater than its face value.

Discount Rate

The interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve's discount window.

Cash Discounts

Reductions in price offered to customers for prompt payment of their bills.

Interest Days

The number of days over which interest is calculated, often used in the context of loans or investments.