Final answer:
Martha's total repayment amount for the loan is calculated using the simple interest formula, resulting in a total repayment of $36,000 after eight years, with the option C) $36,000 being the correct answer.
Step-by-step explanation:
Martha took out a loan of $32,000 from the bank which offered her 1.25% simple interest for eight years. To calculate the total value that Martha has to repay the bank, we need to calculate the total interest using the formula for simple interest:
Simple Interest = Principal × Rate × Time
Plugging in the values:
Simple Interest = $32,000 × 0.0125 × 8 = $4,000
The total interest that Martha will have to pay over eight years is $4,000. To determine the total repayment amount, we add the original loan amount to the total interest:
Total Repayment Amount = Principal + Total Interest
Total Repayment Amount = $32,000 + $4,000 = $36,000
Therefore, the correct answer is C) $36,000.