Understanding Simple Interest and Maturity Value

What does the maturity value of a simple interest loan represent?

• The interest rate multiplied by the time period

• The total amount to be repaid, including principal and interest

• Only the interest amount

• Only the principal amount

How do you convert a percentage rate to a decimal for calculation purposes?

• Subtract 1 from the percentage

• Multiply the percentage by 10

• Divide the percentage by 100

• Add 1 to the percentage

In the example provided, what is the interest amount for a $1,000 loan at 11% per annum over 2 years?

• $440

• $330

• $220

• $110

What is the modified formula for calculating maturity value using the simple interest formula?

• Principal times rate times time

• Principal plus interest

• Principal divided by (1 + rate times time)

• Principal times (1 + rate times time)

How should you convert a loan period of 100 days into years for calculation?

• 100 divided by 52

• 100 divided by 12

• 100 divided by 365

• 100 divided by 30