Josh borrowed $250 from his mother to buy an electric scooter. If he agrees to repay the amount after 1 year with simple interest at 3% per annum, how much interest (in dollars) will Josh pay?

Introduction:
This is a straightforward simple interest problem involving a small loan. Josh borrows money to buy an electric scooter and must pay back the loan with a fixed simple interest rate after one year. The task is to compute just the interest amount, not the total repayment.

Given Data / Assumptions:

• Principal (P) = $250
• Rate of interest (r) = 3% per annum
• Time (t) = 1 year
• Interest is simple, not compounded

Concept / Approach:
For simple interest, interest is calculated only on the original principal throughout the loan period. The formula for simple interest is:
SI = (P * r * t) / 100Here SI is the simple interest, P is principal, r is the annual rate in percent, and t is the time in years. Because the time is just one year, the calculation is especially direct.

Step-by-Step Solution:
Step 1: Identify the principal: P = 250.Step 2: Identify the rate: r = 3% per annum.Step 3: Identify the time period: t = 1 year.Step 4: Substitute into the simple interest formula: SI = (250 * 3 * 1) / 100.Step 5: Multiply the numerator: 250 * 3 = 750.Step 6: Divide by 100: 750 / 100 = 7.50.Thus, the simple interest Josh must pay after one year is $7.50.

Verification / Alternative check:
Since 3% means 3 per hundred, 3% of 250 is 3/100 of 250. Compute 1% of 250 as 2.5, then multiply by 3 to get 7.5. This matches the formula based calculation and confirms the correctness of the answer.

Why Other Options Are Wrong:
$8.50, $9.50, and $10.50 are larger than 3% of $250 and correspond to incorrectly using a higher rate or miscomputing the percentage. $6.50 is smaller than the correct 3% value and could come from taking a lower percentage or making an arithmetic error.

Common Pitfalls:
Students sometimes confuse simple interest with compound interest, but since there is only one year here, both methods give the same interest. Another common error is multiplying or dividing by 100 incorrectly when dealing with percentages. Carefully substituting values into SI = (P * r * t) / 100 helps avoid these mistakes.

Final Answer:
The interest Josh will pay after one year at 3% simple interest on $250 is $7.50.