Question

Ralph chase plans to sell a piece of property for 170000 he wants the money to be paid off in two ways -a short-term note at 11% interest and a long term note at 9% interest. Find the amount of each note if the total annual interest paid is 171700

Answer 1

There is something wrong with the question because you cannot earn more interest during a year than the principal if you earn only 9% or 11%. You would have to earn more than 100%, so I will do this calculation based on $17,170 (not $171,700) earned in interest per year.

let S = amount received from short term note, and L = amount received from long term note

0.11S + 0.09L = 17170

S + L = 170000

S = 170000 - L

0.11 (170000 - L) + 0.09L = 17170

18700 - 0.11L + 0.09L = 17170

1530 - 0.02L = 0

1530 = 0.02L

L = 1530 / 0.02 = $76,500

S = 170000 - 76500 = $93,500