Question

Calculate the maturity value of a simple interest, 12-month loan of $4000 if the interest rate is 4.6%.

Answer 1

Hello! To find the value after 12 months, we have to use the formula below:

$\begin{gathered} fees=value\cdot rate\cdot\text{time} \\ fees=4000\cdot0.046\cdot12 \\ \text{fees = 2208} \end{gathered}$

Final value = initial value + fees

Final value = 4000 + 2208

Final value = $6208