Find the simple interest charged on borrowing $325 for 5 years at a simple interest rate of 3% per annum.

Introduction:
This question tests direct calculation of simple interest when principal, rate, and time are provided. Simple interest is computed as SI = (P * r * t)/100. Since all quantities are already in compatible units (rate per annum and time in years), it is a straightforward one-step substitution and is therefore easy difficulty.

Given Data / Assumptions:

• Principal P = $325
• Rate r = 3% per annum
• Time t = 5 years
• Formula: SI = (P * r * t) / 100

Concept / Approach:
Substitute P, r, and t into the simple interest formula. Multiply principal by rate and time, then divide by 100 to convert percentage into a fraction of 1.

Step-by-Step Solution:
SI = (P * r * t) / 100 SI = (325 * 3 * 5) / 100 SI = (325 * 15) / 100 SI = 4875 / 100 SI = 48.75

Verification / Alternative check:
Yearly interest at 3% on $325 is 0.03 * 325 = $9.75. Over 5 years, interest = 9.75 * 5 = $48.75, matching the formula result.

Why Other Options Are Wrong:
$46.00 and $34.75 are too low, usually coming from wrong multiplication or wrong percentage handling. $59.00 is too high. $52.00 is a plausible distractor but does not match the exact computation.

Common Pitfalls:
Forgetting to divide by 100, using 3 as 0.3, or mistakenly compounding interest. Another mistake is multiplying by 5 twice or not at all.

Final Answer:
The simple interest charged is $48.75.