The formula for calculating Simple Interest (SI) is:

$SI = \frac{P \cdot R \cdot T}{100}$

Where:

• $P$ = Principal amount = 5000
• $R$ = Annual interest rate = 5%
• $T$ = Time = 3 years

Substituting the values:

$SI = \frac{5000 \cdot 5 \cdot 3}{100}$

$SI = \frac{75000}{100} = 750$

Final Answer:

The simple interest earned is $750.

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Would you like further details or have any questions? Here are 5 related questions to explore:

1. How do you calculate the total amount including the interest earned?
2. What happens if the time is in months instead of years?
3. How does compound interest differ from simple interest in this scenario?
4. What would be the interest if the rate increased to 7%?
5. Can you calculate the interest for fractional years (e.g., 2.5 years)?

Tip: Simple interest is straightforward but works best for shorter investment periods or when compounding is not involved. Always double-check the time units used!