To calculate the future value of an investment with simple interest, you can use the formula:
Future Value (FV) = Principal + (Principal × Rate × Time)
In this case, the principal (the initial amount) is $10,000, the interest rate is 6%, and the time period is 2 years. First, we need to convert the interest rate from a percentage to a decimal by dividing by 100:
6% = 0.06
Now, plug the values into the formula:
FV = $10,000 + ($10,000 × 0.06 × 2)
Calculating the interest earned:
Interest = $10,000 × 0.06 × 2 = $1,200
Now, add the interest to the principal to get the future value:
FV = $10,000 + $1,200 = $11,200
Therefore, the future value of $10,000 on deposit for 2 years at 6% simple interest is $11,200.