For each of the notes signed by Lance Supply, complete the following tables. Use the first table to show your calculations of (a) the maturity date of the note, (b) the interest on the note, and (c) the maturity value of the note. Use the second table to show (a) the total interest, (b) the maturity date, and (c) the total maturity value.

Note
Date
Principal
Interest Rate
Time
NR12 March 22 $8,000.00 6% 120 days
NR13 April 7 $6,000.00 7% 90 days

1 answer

Let's calculate the required values for each note, using the formulas for interest and the maturity value.

Interest Calculation

The formula for calculating interest is: \[ \text{Interest} = \text{Principal} \times \text{Interest Rate} \times \frac{\text{Time}}{360} \] Where Time is in days and the Interest Rate is expressed as a decimal.

Maturity Value Calculation

The maturity value is calculated as: \[ \text{Maturity Value} = \text{Principal} + \text{Interest} \]

Note NR12 Calculations

  • Principal: $8,000.00
  • Interest Rate: 6% or 0.06
  • Time: 120 days

a. Maturity Date: Start Date: March 22 Maturity Date: March 22 + 120 days = July 20

b. Interest Calculation: \[ \text{Interest} = 8000 \times 0.06 \times \frac{120}{360} = 8000 \times 0.06 \times \frac{1}{3} = 8000 \times 0.02 = 160 \]

c. Maturity Value Calculation: \[ \text{Maturity Value} = 8000 + 160 = 8160 \]

Note NR13 Calculations

  • Principal: $6,000.00
  • Interest Rate: 7% or 0.07
  • Time: 90 days

a. Maturity Date: Start Date: April 7
Maturity Date: April 7 + 90 days = July 6

b. Interest Calculation: \[ \text{Interest} = 6000 \times 0.07 \times \frac{90}{360} = 6000 \times 0.07 \times \frac{1}{4} = 6000 \times 0.0175 = 105 \]

c. Maturity Value Calculation: \[ \text{Maturity Value} = 6000 + 105 = 6105 \]

Summary Tables

Table 1: Individual Note Calculations

| Note | Date | Principal | Interest Rate | Time (days) | Maturity Date | Interest | Maturity Value | |-------|--------------|------------|---------------|-------------|---------------|-----------|----------------| | NR12 | March 22 | $8,000.00 | 6% | 120 | July 20 | $160.00 | $8,160.00 | | NR13 | April 7 | $6,000.00 | 7% | 90 | July 6 | $105.00 | $6,105.00 |

Table 2: Total Summary

| Total | Total Interest | Total Maturity Date | Total Maturity Value | |--------|-----------------|----------------------|-----------------------| | | $265.00 | July 20 (latest date)| $14,265.00 |

Note:

The total maturity date is considered the latest of the two maturity dates. The total maturity value is just the sum of the individual maturity values.