Question

Debra borrowed a total of $22,000 from two different banks to start a business. One bank charged 5% simple interest, and the other charged 6.5% simple interest. If the total interest after 3 years was $3480 determine the amount borrowed from each bank.

Answer 1

To find the amounts borrowed from each bank, we set up two equations: x + y = $22,000 and 0.05x + 0.065y = $3,480, where x is the amount borrowed at 5% interest and y is the amount borrowed at 6.5% interest. Using substitution or elimination, we can solve for x and y to find the amounts borrowed from each bank.

Step-by-step explanation:

To solve the problem, we first need to set up two equations based on the information given. We will let x represent the amount borrowed at 5% simple interest, and y represent the amount borrowed at 6.5% simple interest.

Our first equation comes from the total amount borrowed: x + y = $22,000.

The second equation comes from the total simple interest: 0.05x + 0.065y = $3,480. This equation is formed by taking the principal times the rate times the time for each loan and adding them together to get the total interest.

We can solve these equations using the method of substitution or elimination. If we solve for y in the first equation, we get y = $22,000 - x.

Substituting this into the second equation gives us 0.05x + 0.065($22,000 - x) = $3,480. Expanding and solving for x gives us the amount borrowed at 5% interest, and using the first equation again with our newly found x gives us the amount borrowed at 6.5% interest.