Question

Find the simple interest earned after 12 years on an investment of $5,000 at 4% interest earned annually

Answer 1

After first year (same as in the beginning of second year) you have 5000*1.04=5200$. During second year that amount gains 4% interest so after second year you have 5200*1.04$.
Or in other expression 5000*1.04*1.04. Or more shortly 5000*1.04^2.