Final answer:
Using the simple interest formula, I = PRT, the total interest paid on a $23,000 loan over 5 years at a 4% interest rate comes to $4,600. The correct answer is $4,600 in simple interest.
Step-by-step explanation:
To calculate the simple interest you would pay on a $23,000 loan with a 4% interest rate over 5 years, you can use the simple interest formula:
Interest (I) = Principal (P) × Rate (R) × Time (T)
Substituting the given values into the formula gives us:
I = $23,000 × 0.04 × 5
I = $4,600
Therefore, after 5 years, you would pay $4,600 in simple interest on your loan. The correct answer is option a) $4,600.