Question 1175720: Sara obtains a $1,000 loan to purchase a laser printer. Her interest rate is 7% ordinary interest for 100 days. What's her total interest and maturity value?
Answer by CPhill(1959)   (Show Source):
You can put this solution on YOUR website! Let's break down how to calculate the ordinary interest and maturity value for Sara's loan.
**1. Calculate the Ordinary Interest**
* **Principal (P):** $1,000
* **Interest Rate (R):** 7% or 0.07
* **Time (T):** 100 days
* **Ordinary Interest:** Ordinary interest uses a 360-day year.
* **Formula:** Interest (I) = P * R * (T / 360)
* **Calculation:**
* I = $1,000 * 0.07 * (100 / 360)
* I = $70 * (100 / 360)
* I = $70 * 0.277777...
* I ≈ $19.44
**2. Calculate the Maturity Value**
* **Maturity Value (MV):** Principal (P) + Interest (I)
* **Calculation:**
* MV = $1,000 + $19.44
* MV = $1,019.44
**Results**
* Total Interest: $19.44
* Maturity Value: $1,019.44
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