Apply the problem-solving strategy to find the simple interest earned given the principal, rate of interest, and time.

Problem: Nathaly deposited $12,500 in her bank account where it will earn $4\%$ simple interest. How much interest will Nathaly earn in $5$ years?

1. Identify what to find: the simple interest.
2. Name the unknown: Let $I$ = interest.
3. Translate into an equation using the simple interest formula $I = Prt$. Given $P = 12{,}500$, $r = 0.04$, and $t = 5$: $I = (12{,}500)(0.04)(5)$
4. Solve the equation: $I = 2{,}500$
5. Answer: The interest Nathaly will earn is $2,500.