Meredith borrows $12,560 and pays 2 percent simple interest each year for 4 years. What is the total amount of interest that she will pay on the loan?

Use the simple-interest formula: interest = principal × rate × time. Substituting the values gives $12,560 × 0.02 × 4 = $1,004.80. Meredith will pay $1,004.80 in interest, which is choice B.

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