Answer :
The simple interest formula is
[tex]A=P(1+rt)[/tex]Where A is the final amount, P is the initial principal balance, r is the annual interest rate and t is the time in years.
In our case, (5%=0.05)
[tex]A=12000(1+0.05\cdot1)=12000\cdot(1.05)=12600[/tex]In total, they received $12600 at the end of the year, and 12600-12000=$600 are purely interest.