Final answer:
The total amount of interest charged on a 12,500 loan with 6% interest compounded monthly over four years is 3,381.11, calculated by subtracting the principal from the future value of the loan.
Step-by-step explanation:
The question involves calculating the total amount of interest charged on a four-year loan when the interest is compounded monthly. To find the total interest charged, you take the future value of the loan after the interest has been applied and subtract the principal amount of the loan. The given future value of the loan is 15,881.11. Since the principal amount of the loan is 12,500, you find the interest by subtracting the principal from the future value:
Interest = FV - Principal
Interest = 15,881.11 - 12,500
Interest = 3,381.11
So, the total amount of interest charged on the 12,500 loan with 6% interest compounded monthly over four years is 3,381.11.