The formula for annual compound interest, including principal sum, is:
A = P (1 + r/n) (nt)
Where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (500)
r = the annual interest rate (.03)
n = the number of times that interest is compounded per year (1)
t = the number of years the money is invested (3)
A=5000(1+.03/1)^1(3)
A=546.36
Interest (I) gained is A-P
I=546.36-500
I=46.36