Future or Maturity Value for Simple Interest
The future or maturity value A of P dollars at a simple interest rate r for t years is
A = P(1 + rt).
A loan of 2500 to be repaid in 8 months with interest of 9.2%
The loan is for 8 months, or = of a year. The maturity value is
A = P( 1 + rt)
A = 2500(1 + .06133) = 2653.33
or 2653.33. (The answer is rounded to the nearest cent, as is customary in financial problems.) Of this maturity value.
2653.33 – 2500 = 153.33