Applications 1.2

Question

A bank loaned $10,000, some at an annual rate of 8% and some at an annual rate of 12%, If the income from these loans was $1000, how much was loaned at 8%? How much at 12%?

Answer 1

Interest = Principle*Rate*Time

 

Principle = $10,000.  Let x =the amount lent at 12%.  The amount lent at 8% is thus ($10,000-x).

 

The problem doesn't give the time period, so I'll assume Time = 1 year.

 

Interest =$1000 = x*(0.12)*1 + (10,000-x)*(0.08)*1

 

1000 = 0.12x + 800 - 0.08x

 

200 = 0.04x

 

Solve for x.