Determine the acquired interest amount of a $5000 student loan with a simple interest rate of 5.4% over a period of eight years round answered to two decimal places as needed
To determine the acquired interest amount on a student loan, we can use the formula for simple interest:
I = P * r * t
Where:
I = Interest amount
P = Principal amount (initial loan amount)
r = Interest rate per period
t = Number of periods
Given:
P = $5000
r = 5.4% or 0.054 (convert the percentage to a decimal)
t = 8 years
Plugging in these values into the formula:
I = 5000 * 0.054 * 8
I = $2,160
Therefore, the acquired interest amount on a $5000 student loan with a simple interest rate of 5.4% over a period of eight years is $2,160.