Answer:
To calculate the interest Pema will pay, we can use the formula for simple interest:
Interest = Principal x Rate × Time
Given:
Principal (P) = Nu 28,800
- Annual interest rate (R) = 12.5% or
0.125 (in decimal form)
Time (T) = 2 years
Plugging in the values:
Interest 28,800 × 0.125 × 2
Interest 28,800 × 0.25
Interest 7,200
Therefore, Pema will pay Nu 7,200 in interest over the 2-year period.
