Final answer:
The simple interest owed on a $1000 loan at a 9% interest rate for 1 year is $90. The maturity value of the loan, which includes the original principal plus the interest, is $1090.
Step-by-step explanation:
Calculating Simple Interest and Maturity Value
To find the simple interest owed on a $1000 loan with an interest rate of 9% for 1 year, we will use the simple interest formula: Simple Interest (I) = Principal (P) × Interest Rate (r) × Time (t).
If we apply the values from the question:
Principal (P) = $1000
Interest Rate (r) = 9% or 0.09 (as a decimal)
Time (t) = 1 year
Using the formula: I = $1000 × 0.09 × 1.
Thus, the simple interest owed is: I = $90.
To determine the maturity value, we add the simple interest to the principal amount: Maturity Value = Principal + Interest, which is Maturity Value = $1000 + $90 = $1090.
The maturity value of the loan after one year is therefore $1090.