Question

Makayla borrows $15200. Some is from her friend at 5% annual interest, 2 times as much as that from her bank at 8% , and the remainder from her insurance company at 4%. She pays a total of $968 in interest for the first year. How much did she borrow from each source?

Answer 1

Amount borrowed from friend = 4000

From Bank = 8000

From insurance = 3200

Explanation:

Given that:

Amount borrowed = $15200

Let amount borrowed from friend = x

x at 5% = 0.05x

From Bank = 2x at 8% = 0.08*2x = 0.16x

From insurance = 15200 - (x + 2x) at 4%

From insurance = 15200 - 3x at 4% ; (15200 - 3x)* 0.04 = 608 - 0.12x

Interest paid in first year = $968

Simple interest = principal * rate * time

968 =

968 = (0.05x + 0.16x + 608 - 0.12x)

968 - 608 = 0.05x + 0.16x - 0.12x

360 = 0.09x

x = 360 / 0.09

x = 4000

Hence,

Amount borrowed from friend = 4000

From Bank = 2x = 4000 * 2 = 8000

From insurance = 15200 - (4000 + 8000) = 3200