Final answer:
Rocco has to repay a total of $36,000 after 5 years, which includes the principal of $32,000 and the simple interest of $4,000 calculated at a rate of 0.025 per annum over 5 years.Therefore, the correct option is: C. $36,500.
Step-by-step explanation:
To calculate the total value Rocco has to repay the bank for his car loan, we need to apply the formula for simple interest, which is I = Prt, where I is the interest, P is the principal amount (the initial amount of the loan), r is the annual interest rate, and t is the time in years. In Rocco's case, P is $32,000, r is 0.025, and t is 5 years. Using the formula:
- I = $32,000 * 0.025 * 5
- I = $4,000
The total amount of interest Rocco will have to pay over the 5-year period is $4,000. To find the total value Rocco has to repay, we add this interest to the principal amount:
- Total value = Principal + Interest
- Total value = $32,000 + $4,000
- Total value = $36,000
Therefore, the total value Rocco has to repay the bank after 5 years is $36,000, which corresponds to option C. Therefore, the correct option is: C. $36,500