Question

Ralph Chase plans to sell a piece of property for ​$150000. He wants the money to be paid off in two ways a - ​short-term note at ​11% interest and a​ long-term note at 8​% interest. Find the amount of each note if the total annual interest paid is ​$15200

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Answer 1

Amount on 11% note = $106,666.67

Amount on 8% note = $43,333.33

Explanation:

Let the amount for the ​short-term note at ​11% interest be x.

Thus, the amount for the ​short-term note at ​8% interest will be (150000 - x)

Now we are told that the total interest paid is $15,200.

Thus;

0.11x + 0.08(150000 - x) = 15200

0.11x + 12000 - 0.08x = 15200

Rearranging gives;

0.03x = 15200 - 12000

0.03x = 3200

x = 3200/0.03

x = $106666.67

Thus, amount for 8% note = $150000 - $106666.67 = $43,333.33