Meredith borrows $12,560 and pays 2 percent simple interest each year for 4 years. What is the total amount of interest that she will pay on the loan?

Question

A. $251.20

B. $1,004.80

C. $11,555.20

D. $13,564.80

Answer 1

To calculate the total amount of interest, we can use the formula: interest = principal * rate * time.

The principal borrowed is $12,560.
The rate is 2%, which can be written as 0.02.
The time is 4 years.

Therefore, the total interest paid is $12,560 * 0.02 * 4 = $1,004.80.

The correct answer is B. $1,004.80.