To calculate the simple interest earned on an investment, you can use the formula:
\[ \text{Simple Interest} = P \times r \times t \]
Where:
- \( P \) is the principal amount (the initial investment),
- \( r \) is the rate of interest per year (in decimal),
- \( t \) is the time the money is invested or borrowed for (in years).
For your example:
- \( P = 10,000 \)
- \( r = 9% = 0.09 \)
- \( t = 1 \) year
Now, plug the values into the formula:
\[ \text{Simple Interest} = 10,000 \times 0.09 \times 1 \]
\[ \text{Simple Interest} = 10,000 \times 0.09 = 900 \]
So, the simple interest earned on an investment of $10,000 at a rate of 9% per annum for 1 year is $900.
To find the total amount after 1 year, you would add the interest to the principal:
\[ \text{Total Amount} = \text{Principal} + \text{Interest} = 10,000 + 900 = 10,900 \]
Thus, the total amount after 1 year would be $10,900.
3 answers