Answer:
Explanation:
To compare the two investment options, we need to calculate the total amount of interest earned in each case.
For the first investment at 8% simple interest, the interest earned after 3 years would be:
Interest = Principal x Rate x Time
Interest = R9000 x 0.08 x 3
Interest = R2160
The total amount after 3 years would be the principal plus the interest:
Total amount = Principal + Interest
Total amount = R9000 + R2160
Total amount = R11160
For the second investment at 7% compound interest, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = total amount
P = principal
r = annual interest rate
n = number of times interest is compounded per year
t = time in years
In this case, we have:
P = R9000
r = 0.07
n = 1 (interest is compounded annually)
t = 3
A = R9000(1 + 0.07/1)^(1*3)
A = R9000(1.07)^3
A = R11684.61
Therefore, the second option with compound interest at 7% per annum is better, as it yields a higher total amount after 3 years.