Problema Solution
A mortgage broker purchased two trust deeds for a total of $280,000. One trust deed earns 5% simple annual interest, and the second one earns 6% simple annual interest. If the total annual interest from the two trust deeds is $15,500, what was the purchase price of each trust deed?
Answer provided by our tutors
Let
x = the purchase price of the first trust deed that earns 5% simple annual interest
y = the purchase price of the second trust deed that earns 6% simple annual interest
x + y = 280,000
0.05x + 0.06y = 15500
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x = $130,000
y = $150,000
The purchase price of the first trust deed was $130,000.
The purchase price of the second trust deed was $150,000.