Alan borrowed money from a credit union for 5 years and was charged simple interest at an annual rate of 8% . The total interest that he paid was 2000. much money did he borrow? If necessary, refer to the list of financial formulas.

To solve this problem, we can use the formula for simple interest:<br /><br />\[ \text{Simple Interest} = \frac{P \times R \times T}{100} \]<br /><br />Where:<br />- \( P \) is the principal amount (the amount borrowed)<br />- \( R \) is the annual interest rate<br />- \( T \) is the time in years<br /><br />Given:<br />- The total interest paid (\( \text{Simple Interest} \)) is $2000<br />- The annual interest rate (\( R \)) is 8%<br />- The time (\( T \)) is 5 years<br /><br />We need to find the principal amount (\( P \)).<br /><br />Rearranging the formula to solve for \( P \):<br /><br />\[ P = \frac{\text{Simple Interest} \times 100}{R \times T} \]<br /><br />Substituting the given values:<br /><br />\[ P = \frac{2000 \times 100}{8 \times 5} \]<br /><br />\[ P = \frac{200000}{40} \]<br /><br />\[ P = 5000 \]<br /><br />Therefore, Alan borrowed $5000.