Final answer:
To calculate the interest owed at the end of 1 month on a loan of $1,250 at a monthly interest rate of 12%, multiply the principal by the rate (in decimal form) and by the time. The calculation results in an interest amount of $150 for the first month.
Step-by-step explanation:
The student has borrowed $1,250 at a monthly interest rate of 12%. To calculate the interest owed at the end of 1 month, the formula for simple interest can be applied, which is Interest = Principal × Rate × Time.
The principal (P) is $1,250, the rate (R) is 12% per month, and the time (T) is 1 month. First, convert the percentage rate to its decimal form by dividing by 100, which gives us 0.12. The calculation would then be:
Interest = $1,250 × 0.12 × 1
Therefore, the interest owed after 1 month is $150.