Answer:
Maturity value is the amount to be received on the due date or on the maturity of instrument/security that investor is holding over its period of time and it is calculated by multiplying the principal amount to the compounding interest which is further calculated by one plus rate of interest to the power which is time period.
The formula that is used for calculation of Maturity value involves the use of principal amount that is the amount which is invested at the initial period, and n is the number of periods for which the investor is investing in, and r is the rate of interest that is earned on that investment.
When one takes the frequency of compounding as a power to rate, it gets multiples, which is nothing but compounding, and then when that result is multiplied by principal amount, one gets the maturity value that one can have.
Step-by-step explanation:
