Final answer:
Billy will pay $5,100 in interest on his $12,000 student loan over a 10-year period at an annual interest rate of 4.25%, using the simple interest calculation.
Step-by-step explanation:
To calculate the total amount of interest Billy will pay on his $12,000 student loan at an annual interest rate of 4.25% over 10 years, we can use the formula for simple interest: Interest = Principal × Rate × Time. However, it's important to note that, with most student loans, the interest compounds over time, meaning the amount of interest would increase each year based on the new balance.
Nevertheless, this question requires a simple interest calculation for a straightforward answer.In Billy's case, using the simple interest formula:Principal (P) = $12,000Annual interest rate (r) = 4.25% or 0.0425 in decimal formTime (t) in years = 10The simple interest Billy would pay is calculated as follows:Interest = P × r × Interest = $12,000 × 0.0425 × 10 = $5,100