Anna and Martha are trying to answer this question.

Mel borrows some money at a fixed rate of interest. He owes $9062.50 at the end of ten years. If the rate of simple interest is 2.5%/a, how much was the original loan amount?

Anna thinks they should use I = Prt to solve the problem, but Martha thinks they should use A = P(1 + rt).

a) Who is correct? Explain your reasoning.

b) Answer the question.