tcapele8966 tcapele8966
  • 26-04-2018
  • Mathematics
contestada

The maturity value of a 5-year, 6.25% ordinary interest commercial loan is $361,593.75. Find the principal.

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CastleRook
CastleRook CastleRook
  • 07-05-2018
The principle will be calculated as follows:
FV=P(1+r/100)^n
P=361,593.75
r=6.25%
n=5 years
plugging the values in the formula and solving for P we shall have:
361,593.75=P(1+6.25/100)^5
361,593.75=P*1.0625^5
P=267,039.94
thus the value of the principle was $267,037.94

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