Question

Samantha took out two loans totaling $6000 to pay for her first year of college. She narrowed the maximum amount she could at 3.5% simple annual interest and the remainder at 7% simple annual interest. At the end of the first year, she owed $259 in interest. How much was bolorrowed

Answer 1

Our simple interest formula is I = prt, where I is the amount of interest, p is the amount of principal, r is the percentage written as a decimal, and t is the amount of time (in this case in years). We will define our variable x as the amount borrowed at the lower percentage rate. Our formula would then look like

. (Remember that when we convert percentages to decimals, we divide by 100; 3.5/100 = 0.035.)

The remaining money borrowed was invested at 7% interest. The expression to represent the remaining money would be 6000 - x, as it is what was left over to borrow. The interest formula for this loan would be

. (Again, we must divide 7 by 100 to convert the percentage; 7/100=0.07.)

Using the distributive property we have:

(t in this case is 1, since it is 1 year.)

The total amount of interest for both loans for one year was $259, so we have:

Combine our like terms:

Cancel 420 by subtracting:

Cancel -0.035 by dividing:

This means she borrowed $4600 at the lower interest rate. The remainder would be $6000-$4600=$1400 at the higher interest rate.