Question

Spencer borrowed $50 from his cousin, who charged him 6% simple interest each year. If Spencer pays his cousin back 3 years later, how much will he owe his cousin?
A
$56
B
$59
С
$68
D
$6

Answer 1

Given:

Principal = $50

Rate of simple interest = 6%

Time = 3 years

To find:

The amount after 3 years.

Solution:

Formula for simple interest:

$I=\dfrac{P\times r\times t}{100}$

Where, P is principal, r is the rate of interest in percentage and t is the number of years.

Putting $P=50,\ r=6,\ t=3$ in the above formula, we get

$I=\dfrac{50\times 6\times 3}{100}$

$I=\dfrac{900}{100}$

$I=9$

Formula for amount is:

$A=P+I$

Where, P is principal and I is the simple interest.

Putting $P=50,\ I=9$, we get

$A=50+9$

$A=59$

Therefore, the correct option is B.