Question

A bank loaned out $23,500, part of it at the rate of 5% annual interest, and the rest at 6% annual interest. The total interest earned for both loans was $1,280.00. How much was loaned at each rate?

Answer 1

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Answer 2

Let x be the amount loaned at 5% annual interest, then the rest of the loan, $23,500 - x, is loaned at 6% annual interest.

The interest earned from the loan at 5% annual interest is 0.05x, and the interest earned from the loan at 6% annual interest is 0.06($23,500 - x) = $1,410.00 - 0.06x.

The total interest earned is given as $1,280.00, so we can set up the equation:

0.05x + (1,410 - 0.06x) = 1,280

Simplifying and solving for x, we get:

0.05x + 1,410 - 0.06x = 1,280

-0.01x = -130

x = 13,000

Therefore, $13,000 was loaned at 5% annual interest, and $10,500 ($23,500 - $13,000) was loaned at 6% annual interest.