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What principal will have a maturity value of $ 12 000.00 at % in 3 months...

What principal will have a maturity value of $ 12 000.00 at % in 3 months ?

what principle will have a maturity value $12000value at 6.25%p.a. in 3 months

Solutions

Expert Solution

For calculating interest we use the following formula

Principal + Interest = Maturity value of investment

Accordingly

Given Interest rate is for 1 year that is 6.25%

Let us calculate the 3 months interest rate

1 year = 12 months

Hence for 3 months interest rate is 6.25 * (3/12) = 1.5625%

Accordingly we were given the maturity value of investment as $12000

Now, 12000 = Principal + Principal * Interest

Let X be the principal

12000 = X + X * (1.5625)/100

12000 = X * 1.015625

X = 12000/1.015625

X = 11815.38

hence the principal amount is $11815.38

jeff jeffy answered 2 years ago
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