Question

Ralph Chase plans to sell a piece of property for $155000. He wants the money to be paid off in two ways - a short-term note at 9% interest and a

long-term note at 7% interest. Find the amount of each note if the total annual interest paid is $12550.

Answer 1

7% = 70.000

9% = 85,000

Explanation:

Two equations can be derived from this question

x + y = 155,000 equation 1

0.09x + 0.07y = 12,550 equation 2

where y = amount invested in 7% note

x = amount invested in 9% note

multiply equation 1 by 0.09

0.09x + 0.09y = 13,950 equation 3

subtract equation 2 from 3

0.02y = 1400

y = 70,000

substitute for y in equation 1

70,000 + x -= 155,000

x = 155,000 - 70,000

x = 85,000