I'm guessing that this problem is talking about a loan of some sort. So basically, let's look at the given. In the problem, Leon is charged a fee of 75. The interest rate would be 12.5 % if he doesn't pay his due amount. So in order to get the total amount that he has to pay if he doesn't pay on time, you just need to multiply 75 with 12.5% or simply 0.125. If you do this, you will get 9.375. After that, you add 9.375 to the principal amount which is 75 and you will get 84.375. So Leon has to now pay a total of 84.375.
