Final answer:
Rocco took out a loan for $32,000 with a 2.5% per annum simple interest rate for 5 years. Using the formula for simple interest (A = P × (1 + nr)), the total amount to repay is calculated as $36,000, which includes both the principal and the interest accrued over the loan period.
Step-by-step explanation:
The student is asking about calculating the total amount that Rocco has to repay the bank for a loan he took out to purchase a new car. The calculation is based on simple interest. The formula provided for simple interest is A = P × (1 + nr), where P is the principal amount of the loan, n is the number of years, and r is the interest rate per year.
To calculate the total value Rocco has to repay the bank, we use the given values:
P = $32,000 (the cost of the car),
n = 5 years, and
r = 0.025 (or 2.5% per annum).
Thus, the calculation would be:
A = $32,000 × (1 + (5 × 0.025))
A = $32,000 × (1 + 0.125)
A = $32,000 × 1.125
A = $36,000
The total amount Rocco will have to repay after 5 years is $36,000, which includes the principal and the interest. Therefore, the correct answer is (d) $36,000.