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=(P* r* 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=(50* 6* 3)/(100)`

`I=(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.