To calculate the simple interest Mr. Dunn earns after 3 years, we use the formula for simple interest:

$\text{Simple Interest} = P \times r \times t$

where:

• $P$ is the principal (initial investment),
• $r$ is the annual interest rate (in decimal form),
• $t$ is the time the money is invested for, in years.

For Mr. Dunn:

• $P = 1000$,
• $r = 5\% = 0.05$,
• $t = 3$ years.

Now, calculating the simple interest:

$\text{Simple Interest} = 1000 \times 0.05 \times 3 = 150$

So, Mr. Dunn earns $150 in simple interest after 3 years.

Would you like more details or have any questions?

Here are 5 related questions to explore further:

1. How much total amount will Mr. Dunn have after 3 years (principal + interest)?
2. How does compound interest differ from simple interest in this context?
3. What would the simple interest be if the interest rate were 6% instead of 5%?
4. How much interest would Mr. Dunn earn after 5 years at the same rate?
5. What is the formula for calculating compound interest?

Tip: Always check whether interest is compounded or simple—this makes a big difference over time!