To calculate the simple interest on a loan, you can use the formula:
\[ \text{Simple Interest} = P \times r \times t \]
where:
- \( P \) is the principal amount (the initial loan amount),
- \( r \) is the interest rate (expressed as a decimal),
- \( t \) is the time in years.
Given:
- \( P = 20,009 \)
- \( r = 8% = 0.08 \)
- \( t = 5 \)
Now, substituting the values into the formula:
\[ \text{Simple Interest} = 20,009 \times 0.08 \times 5 \]
Calculating it step by step:
- Calculate \( 0.08 \times 5 = 0.4 \)
- Now calculate \( 20,009 \times 0.4 \)
\[ 20,009 \times 0.4 = 8,003.6 \]
Thus, the simple interest on a $20,009 loan at an interest rate of 8 percent after 5 years is $8,003.60.