Josh borrowed 250 dollars from his mother to buy an electric scooter and agreed to pay her back in 1 year at 3% simple annual interest. How much interest will Josh pay at the end of the year?

Introduction / Context:
This is a basic simple interest question involving a real world story about borrowing money to buy an electric scooter. The main idea is to apply the simple interest formula correctly using the principal, rate, and time. It is a typical example given to beginners when introducing interest concepts and money related word problems.

Given Data / Assumptions:

• Principal P = 250 dollars.
• Rate of simple interest r = 3% per year.
• Time t = 1 year.
• Interest is simple, not compounded.
• We want the interest amount I that Josh will pay.

Concept / Approach:
For simple interest, the formula is I = (P * r * t) / 100 when r is given as a percentage. Because the period is exactly one year, the calculation is especially easy: we simply find 3% of 250 dollars. The result is the amount Josh pays as interest in addition to the original 250 dollars when he repays his mother.

Step-by-Step Solution:
Step 1: Identify the principal P = 250. Step 2: Identify the annual simple interest rate r = 3%. Step 3: Identify the time period t = 1 year. Step 4: Use the simple interest formula I = (P * r * t) / 100. Step 5: Substitute values: I = (250 * 3 * 1) / 100. Step 6: Multiply the numerator: 250 * 3 = 750. Step 7: Divide by 100: 750 / 100 = 7.50. Step 8: Therefore, Josh will pay 7.50 dollars as interest.

Verification / Alternative check:
A quick mental check is that 1% of 250 is 2.50. Therefore, 3% is 3 times 2.50, which equals 7.50. This mental calculation matches the formula based result exactly and confirms that no arithmetic errors were made. Since the time is only one year, there is no need to consider multiple years or compounding in this problem.

Why Other Options Are Wrong:
The option 8.50 is larger than 7.50 and would correspond to a rate higher than 3% on 250 dollars. The option 9.50 is even larger and suggests an even higher interest rate. The option 10.50 is still greater and could only be justified by an incorrect interpretation of percentage or time. The option 6.50 is lower than the correct value and would correspond to an interest rate of 2.6% rather than 3%. Only 7.50 is exactly 3% of 250, matching the given data.

Common Pitfalls:
Although this is a simple calculation, students sometimes confuse percent and decimal representations and multiply by 3 instead of by 3 divided by 100. Others may accidentally treat the rate as 0.3 instead of 0.03 when working in decimal form. Some learners also incorrectly apply a compound interest formula when the problem clearly states simple interest, which is unnecessary and can lead to confusion. Keeping the simple interest formula in mind and checking that the percentage is handled correctly prevents these mistakes.

Final Answer:
Josh will pay an interest of 7.50 dollars on the 250 dollar loan at 3% simple interest for one year, which corresponds to option A.