Calculate the simple interest on a $20,000 loan at an interest rate of 8 percent after 5 years.

Answer 1

To calculate the simple interest, we use the formula:

Simple Interest = Principal * Rate * Time

Here, the principal is $20,000, the interest rate is 8%, and the time is 5 years. Substituting these values into the formula:

Simple Interest = $20,000 * 0.08 * 5
Simple Interest = $8,000

Therefore, the simple interest on a $20,000 loan at an interest rate of 8% after 5 years is $8,000.