Problema Solution
Ralph Chase plans to sell a piece of property for $160000. He wants the money to be paid off in two ways-a short term note at 10% interest and a long term note at 8% interest. Find the amount of each note if the total annual of interest paid is $14500.
Answer provided by our tutors
let 'x' represent the amount invested at 10%, then '160000-x' represents the amount invested at 8%
we use simple interest:
interest = principal * rate * time
we take time = 1
14500 = 0.10x + 0.08(160000-x)
solving for 'x' we have x=85000
160000-85000=75000
$85,000 at 10% and $75,000 at 8%