What are the amounts of interest and maturity value of a loan for 150,000 at 6 1/2% simple interest for 3 years?

The formula for computing the amount of simple interest is:

I = Prt

Where P = principal amount of the loan

             r = interest rate of the loan

             t = duration of the loan

Substituting the amounts in the formula,

I = (150,000) (6.5%) (3)

  = 29,250

To compute for the maturity value, you have to add the interest to the principal amount:

Maturity value = 150,000 + 29,250 = 179,250