1. **State the problem:** Tommy takes out a loan of £2600 with a simple interest rate of 2.5% per annum and repays it after 10 years. We need to find the total amount he has to pay back. 2. **Formula for simple interest:** $$\text{Simple Interest} = P \times r \times t$$ where $P$ is the principal amount, $r$ is the annual interest rate (in decimal), and $t$ is the time in years. 3. **Calculate the interest:** Convert the interest rate to decimal: $2.5\% = 0.025$ $$\text{Interest} = 2600 \times 0.025 \times 10$$ 4. **Calculate the interest value:** $$2600 \times 0.025 = 65$$ $$65 \times 10 = 650$$ 5. **Calculate total amount to pay back:** $$\text{Total} = \text{Principal} + \text{Interest} = 2600 + 650 = 3250$$ 6. **Answer:** Tommy has to pay back **3250** after 10 years.