Question

Matt has two credit cards with a total balance of $12,000. If one card charges 10% per year and the other charges 7% per year, what is the balance on each card if the total interest charged in the first year was $960?

a) $4,800 and $7,200
b) $5,000 and $7,000
c) $5,600 and $6,400
d) $6,000 and $6,000

Answer 1

The balance on the first card is $4,800 and the balance on the second card is $7,200. Therefore, the balance on the first card is $4,800 and the balance on the second card is (12,000 - 4,800) = $7,200

Step-by-step explanation:

To find the balance on each card, let's first assume that the amount on one card is x.

Since the total balance of both cards is $12,000, the amount on the second card would be (12,000 - x).

In the first year, the interest charged on the first card at a rate of 10% would be 0.10x, and on the second card at a rate of 7% would be 0.07(12,000 - x).

The total interest charged in the first year is given as $960, so we can set up the following equation:

0.10x + 0.07(12,000 - x) = 960

Solving this equation, we find that x = $4,800.

Therefore, the balance on the first card is $4,800 and the balance on the second card is (12,000 - 4,800) = $7,200