Business Degree Certification Practice Test 2025 – All-in-One Comprehensive Guide to Exam Success!

Question: 1 / 400

What is the maturity value of a $600,000 note payable at 12 percent interest due in 90 days?

$72,000

$600,000

$618,000

To determine the maturity value of the note payable, you need to calculate the interest that will accrue over the 90-day period and then add that interest to the principal amount of the note.

First, convert the interest rate from an annual rate to the rate for the 90-day period. The annual interest rate is 12 percent, so for 90 days, which is one-fourth of a year, the calculation for the interest is as follows:

1. Calculate the interest for 90 days:

\[

\text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time}

\]

Here:

- Principal = $600,000

- Rate = 12% per year, which can be expressed as 0.12

- Time = 90 days, which is \(\frac{90}{365}\) years (approximately).

Plugging in the values:

\[

\text{Interest} = 600,000 \times 0.12 \times \frac{90}{365}

\]

2. Simplifying further:

\[

\text{Interest} = 600,000 \times

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$672,000

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