Marks are awarded for listing each component, showing calculations, and providing the final solution.

1. [tex] \$20000 [/tex] is borrowed for 5 years at an interest rate of [tex] 4.5\% [/tex] per year.

a. If the interest is calculated as simple interest, find the amount of interest charged over the 5 years.

b. How much will they have to pay back in total?

Given:

\[
\begin{align}
p &= 20000 \\
r &= \frac{4.5}{100} = 0.045 \\
n &= 5 \\
I &= p \times r \times n \\
\end{align}
\]

Calculations:

\[
I = 20000 \times 0.045 \times 5 = 4500
\]

Therefore, the amount of interest charged over the 5 years is [tex] \$4500 [/tex].

Total repayment:

\[
4500 + 20000 = 24500
\]

Thus, they will have to pay back [tex] \$24500 [/tex] in total.

Sure! Let's solve the problem step-by-step.

1. Understanding the Problem:
- We have borrowed [tex]$20,000 for a period of 5 years.
- The annual interest rate is 4.5%.

2. Calculating the Simple Interest:
- The formula for calculating simple interest is:
\[
I = P \times R \times N
\]
where:
- $ I $ is the interest,
- $ P $ is the principal amount (initial amount borrowed),
- $ R $ is the rate of interest per year (as a decimal),
- $ N $ is the number of years.

3. Plugging in the Values:
- Principal ($ P $) = $[/tex]20,000
- Rate ([tex]$ R $[/tex]) = 4.5% = 0.045 (as a decimal)
- Number of years ([tex]$ N $[/tex]) = 5

Using the formula:

[tex]\[
I = 20000 \times 0.045 \times 5
\][/tex]

The interest calculated is [tex]$4,500.

4. Total Amount to be Paid Back:
- To find out how much needs to be paid back in total, add the interest to the principal:
\[
\text{Total Payment} = 20000 + 4500 = 24500
\]

5. Final Answer:
- The amount of simple interest charged over the 5 years is $[/tex]4,500.
- The total amount that will need to be paid back is $24,500.

Feel free to ask if you have any more questions!