1. **State the problem:** Calculate the simple interest earned on a principal of 5000 invested at an annual simple interest rate of 4% for 3 years. 2. **Formula for simple interest:** $$I = P \times r \times t$$ where $I$ is the interest, $P$ is the principal, $r$ is the annual interest rate (in decimal), and $t$ is the time in years. 3. **Convert the interest rate to decimal:** $$r = 4\% = 0.04$$ 4. **Substitute the values into the formula:** $$I = 5000 \times 0.04 \times 3$$ 5. **Calculate the interest:** $$I = 5000 \times 0.12 = 600$$ 6. **Interpretation:** The simple interest earned after 3 years is 600.