Answer: 15100
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Explanation:
The simple interest formula is
i = P*r*t
where
i = interest
P = is the amount borrowed
r = interest rate in decimal form
t = time in years
In this case,
i = unknown
P = 12500
r = 0.052 (equivalent to 5.2%)
t = 4
So,
i = P*r*t
i = 12500*0.052*4
i = 2600
Which means $2,600 in simple interest is charged on the amount borrowed. You have to pay this amount on top of the $12,500 borrowed.
In total, you have to pay back P+i = 12500+2600 = 15100 which is the final answer
