Problema Solution
Ralph Chase plans to sell a piece of property for $150,000.00. He wants the money to be paid off in two ways, a short term note at 9% interest and a long term note at 7% interest. Find the amount of each note if the total annual interest paid is $12100.00.
The amount of the 9% note is ?
The amount of the 7% note is ?
Answer provided by our tutors
Total Amount = $180,000
Total Interest = $14,600
Amount to be paid off at 9% = x
Amount to be paid off at 7% = 180,000 - x
Amount to be paid off at 9% * 9% + Amount to be paid off at 7% * 7% = Total Interest
x*9/100 + (180000-x)*7/100=14600
x*0.09+(180000-x)*0.07=14600
0.09x+12600-0.07x=14600
0.02x=14600-12600
0.02x=2000
x=2000/0.02
x=100,000
Amount to be paid off at 9% = x = $100,000
Amount to be paid off at 7% = 180,000 - 100,000 = $80,000
Check
100000 * 0.09 + 80000 * 0.07 = 14600
9000+5600=14600
14600=14600