On March 1st, the Picasso Co. issued a 12 month, $120,000 note, to the Bank of Carbondale. The note carries a 10% interest rate and all payments for principal and interest will be paid at the end of 1 year. What is the maturity value of the note?

The maturity value of the note is $132,000

Explanation:

A Loan note is a promissory note that is signed to make a promise of an amount of Loan taken by someone that to be returned after a specific time with interest value at a defined in the loan note.

The maturity value of the loan note can be calculated as follow

Face value = $120,000

Interest rate = 10%

Time period = 1 years

Use following formula to calculate the maturity value of the loan note.

Maturity value = Face value x  ( 1 + interest rate )^ numbers of years

Placing values in the formula

Maturity value = $120,000 x ( 1 + 10% )^1

Maturity value = $132,000

answer; tech (a) is correct;

borrow money from the government then pay the government back 5k