1. **State the problem:** Calculate the area of a circle with diameter 4 cm. 2. **Recall the formula:** The area $A$ of a circle is given by $$A = \pi r^2$$ where $r$ is the radius of the circle. 3. **Find the radius:** The radius is half the diameter, so $$r = \frac{4}{2} = 2 \text{ cm}$$ 4. **Substitute the radius into the formula:** $$A = 3.14 \times 2^2$$ 5. **Calculate the square of the radius:** $$2^2 = 4$$ 6. **Multiply to find the area:** $$A = 3.14 \times 4 = 12.56$$ 7. **Round to the nearest hundredth:** The area is already at two decimal places. **Final answer:** $$A = 12.56 \text{ cm}^2$$