Question

Eric borrowed $21,000 to buy a truck for his business. He borrowed from his parents, a credit union, and a bank. He borrowed three times as much from his parents as from the bank, and the amount of interest he paid at the end of 1 year was $780. How much did he borrow from each source?

a) From his parents
b) From the credit union
c) From the bank

Answer 1

To determine how much Eric borrowed from his parents, the credit union, and the bank, set up a system of equations using the total amount borrowed and the relationship between the amounts. The amount borrowed from the bank is represented as 'x', the amount from his parents as '3x', and from the credit union as the remainder. Solve these equations to find the values.

Step-by-step explanation:

The question presents a scenario where Eric borrowed $21,000 to buy a truck from three different sources: his parents, a credit union, and a bank. He borrowed three times as much from his parents as from the bank, and the interest paid at the end of one year was $780. We can use a system of equations to solve for the amounts borrowed from each source.

Step-by-Step Solution:

1. Let the amount borrowed from the bank be x. Hence, the amount borrowed from his parents is 3x. The amount from the credit union can be expressed as $21,000 - 4x since it is the remainder after subtracting what was borrowed from the bank and parents.
2. The total amount Eric borrowed is the sum of the amounts from the bank, parents, and credit union, which equals $21,000. So, the equation is x + 3x + ($21,000 - 4x) = $21,000.
3. Solve the equation to find the value of x.
4. Once x is found, multiply it by 3 to get the amount borrowed from his parents, and subtract 4x from $21,000 to find out how much was borrowed from the credit union.