A 60-day, 9% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is A. $10,000B. $10,150C. $10,900D. $9,100

Question

Uriel Moyer

Business

11 November, 22:48

A 60-day, 9% note for $10,000, dated May 1, is received from a customer on account. The maturity value of the note is A. $10,000B. $10,150C. $10,900D. $9,100

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Answers (1)

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Cooley · Answer 1

The answer is: Maturity Level = $10.150,00

Explanation:

Notes are often a key component of how a business finances its operations. For purposes of accounting, it's important to be able to calculate the maturity value of a note to know how much a business will have to pay or receive when the note comes due.

In general, notes are a form of short-term commercial financing. The maturity value is the amount of money that the company would receive when the note comes due.

To calculate the maturity value you need to use the following formula:

Maturity level = Principal + Principalx[ix (days/360) ]

The second term of the formula is the interest receive for the passing of time.

In this exercise:

Maturity Level = 10000 + 10000x[0,09x (60/360) ]

Maturity Level = 10000 + 150 = $10150