Step 1

We can start with the simple interest formula:

Where:

• P is the principal ($3000)
• r is the interest rate per year (3%)
• t is the loan duration in years (5 years).

Step 2

With P=3000, r=3% and t=5, we can substitute these values into the formula as shown (Take note that, 3% must be changed to ³/₁₀₀ before we can calculate):

Step 3

The calculated interest is $450. Hence, the answer is A.