How much simple interest is earned on $1,500 invested at 4% annual interest for 3 years?

Simple interest uses the formula I = P × r × t, where P is the principal, r is the annual rate as a decimal, and t is the time in years. Here I = $1,500 × 0.04 × 3 = $60 × 3 = $180. The interest earned is $180. Note the question asks only for the interest, not the total balance — the total would be $1,500 + $180 = $1,680, which is offered as a distractor. Memorize I = Prt for simple interest problems, convert the percent to a decimal (4% = 0.04), and multiply through carefully.