Welcome to Android Forums!
What you want to do is pretty straight forward. First, to make your life slightly easier, make sure you store the mp3 ringtone in a directory on your SD card called "Ringtones". This will keep your new ringtone with the built in tones. Next, bring up your Settings, then go to Sound. Within there ought to be a setting called "Phone Ringtone" or something similar. Select that and you should be prompted to pick a ringtone from a list. Select it and hit OK. You should be all set.
Things may be different from phone to phone so if something doesn't quite match what I've written, try and choose the closest alternative.
If you need a better explanation, just let me know!