Step 1: Write the formula for the area of a circle.
The area $A$ of a circle with radius $r$ is given by the formula:
\[
A = \pi r^2.
\]
Step 2: Use the formula for relative error.
For a quantity $Z = kX^n$, the relative error is given by $\frac{\Delta Z}{Z} = n \frac{\Delta X}{X}$.
In our case, $A = \pi r^2$, so the relative error in the area is:
\[
\frac{\Delta A}{A} = 2 \frac{\Delta r}{r}.
\]
Step 3: Convert to percentage error.
To find the percentage error, we multiply the relative error by 100.
\[
\left(\frac{\Delta A}{A} \times 100%\right) = 2 \left(\frac{\Delta r}{r} \times 100%\right).
\]
Step 4: Substitute the given percentage error in the radius.
We are given that the percentage error in the radius is 3%.
\[
\text{Percentage error in Area} = 2 \times (3%).
\]
\[
\boxed{\text{Percentage error in Area} = 6%}.
\]