Use the formula A = P(1 + rt) to calculate the maturity value of the simple interest loan. (Round your answer to two decimal places.) P = $2400, r = 9.2%, t = 3 months

Question

I got this answer wrong when I written the answer as 3,125.21. Did I do something wrong here?

Answer 1

Not exactly sure how you got 3,125.21, but make sure you convert r into a decimal and convert t into time in years.

P = $2400

r = 9.2% = .092

t = 3 months = 3/12 years = .25 years

A = P(1 + rt) = $2400 (1 + .092*.25) = $2400 (1.023) = $2455.20