Question

$9000 was borrowed from two sources, one that charges 20% simple interest and the other that charges 5% simple interest. If the total interest at the end of 1 year was $1500, how much money was borrowed from each source?

Answer 1

The amount borrowed at 20% simple interest was $7,000, while the amount borrowed at 5% simple interest was $2,000.

Explanation:

Let x represents the amount borrowed at 20% simple interest.

Let y represents the amount borrowed at 5% simple interest.

Therefore, the amount borrowed at 5% simple interest will be:

y = 9000 - x ........................... (1)

As a result, we will have:

20%x = interest at the end of 1 year from the amount borrowed at 20% simple interest

5% * (9000 - x) = 450 - 5%x = interest at the end of 1 year from the amount borrowed at 5% simple interest

Since the total interest at the end of 1 year was $1500, we have:

20%x + 450 - 5%x = 1500

We can now solve for x as follows:

20%x - 5%x = 1500 - 450

15%x = 1050

x = 1050 / 15%

x = 7000

Substituting x = 7000 into equation (1), we have:

y = 9000 - 7000

y = 2000

Therefore, the amount borrowed at 20% simple interest was $7,000, while the amount borrowed at 5% simple interest was $2,000.