Jay borrowed $1,800 for three months at 12.5% simple interest. What was
the total amount he had to repay?
a. $56.25
b. $2,025
c. $1,856.25
d. $2,250
The formula for simple interest is: Interest = Principal x Rate x Time.
In this case, the Principal (amount borrowed) is $1,800, the Rate is 12.5% (or 0.125 as a decimal), and the Time is 3 months (or 0.25 as a fraction of a year since interest is usually calculated annually).
So, Interest = $1,800 x 0.125 x 0.25 = $56.25
This means that after 3 months, Jay would owe the original amount borrowed ($1,800) plus the interest accrued ($56.25), for a total of:
$1,800 + $56.25 = $1,856.25
Therefore, the answer is c. $1,856.25.