1. What is Maturity Value of Loan?

The Maturity Value (MV) of a loan represents the total amount payable at the end of the loan term, consisting of the principal amount plus the accrued interest.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( MV \) — Maturity Value (total amount to be repaid)
• \( Principal \) — Original loan amount
• \( Interest \) — Total interest accrued over the loan term

Explanation: This is the simplest form of loan calculation where interest is added directly to the principal without compounding.

3. Importance of MV Calculation

Details: Calculating the maturity value helps borrowers understand the total repayment obligation and lenders assess the profitability of the loan.

4. Using the Calculator

Tips: Enter the principal amount and total interest in USD. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this calculator account for compound interest?
A: No, this calculator uses simple interest. For compound interest, a different formula would be needed.

Q2: What's the difference between principal and maturity value?
A: Principal is the original loan amount, while maturity value is what you'll repay including interest.

Q3: Can I use this for any type of loan?
A: This works best for simple interest loans. For amortized loans, the calculation is more complex.

Q4: How accurate is this calculation?
A: It's mathematically precise for simple interest loans, but doesn't account for fees or other charges.

Q5: Why would maturity value be important?
A: It helps borrowers plan repayment and understand the true cost of borrowing.