Yeah, but that’s not 3% AER
AER takes compounding into account, however as it stops compounding at £4K you are never going to get the full £10 per month
If you work that calculation backwards from an AER of 3% using 12 payments per year you end up with ~ 2.96%
so on £4K you’d get ~£118.38 ish per year
which is approx £9.72 - £9.73 ish for a 30 day month (I got £9.73, but I rounded some figures in my calculation, £9.72 is most likely correct)
Edit: in a 31 day month you’d get £10.05 so you do make the full £10 some months, But it averages out just under £10
Maybe you could game the system by cancelling plus in 30 day months 
