It's me again:) Would someone have the time to show me how to find the Maturity Value on this one: Face Value= $7.00, Rate = 9%, and Term of loan is 205 days (using ordinary interest). Thanks in advance for any help:) Denise

Question

It's me again:) Would someone have the time to show me how to find the Maturity Value on this one: Face Value= $7.00, Rate = 9%, and Term of loan is 205 days (using ordinary interest).  Thanks in advance for any help:) Denise

anonymous · Answer

answer should come out as $7.36.   I did I=PxRxT and I get .35875 when I divide 205 by 360.  Then I change that to a % and it isn't coming out right.

zpupster · Answer

MV=P(1+rt)
7.00(1+.09(205/365)
7(1+.51)
7+ .35
there is probably some rounding that i did not do

anonymous · Answer

What is the 1 Zp?

anonymous · Answer

Oh, it's ordinary interest so just 360;) Bet that's the dif.

anonymous · Answer

I'll be back, I have to take a break.  I do appreciate your help though.  I just need to find out what the 1 is, thank you much, Denise:)

anonymous · Answer

Oh, I got it, I had it, just didn't see it.  Here's how I figured it using Wolfram site:
(7.00*.09)205/360 = .35875, then I round that to .36 and add it to the 7.00 and got my 7.36.

anonymous · Answer

That's weird because I thought I had to change that decimal to a percent to be Interest amount.  I don't know if this will work on another similar problem, guess I better try one, thanks again for trying to help me:) denise