Question

A bank loaned out $21,500, part of it at the rate of 15% annual interest, and the rest at 9% annual interest. The total interest earned for both loans was $2,025.00. How much was loaned at each rate?

Answer 1

Answer:

So the portion of the loan lent at 4% is 21000(0.5955) = $12,505.5

And the portion of the loan lent at 15% is 21000(0.4045) = $8494.5

Step-by-step explanation:

This problem can be solved in several ways. The way I like is as follows.

Ask yourself at what interest would $ 21,000 yield and interest of $ 2,215 in one year ? The equation to solve is:

21000(P) = 2215

P = 0.1055 or 10.55 %

This number is a weighed average of the 4% yield and the 15% yield so the next equation to solve is

10.55 = 4(1 – X) + 15X

Where X is the proportion of the loan given at the indicated interest. So

10.55 = 4 – 4X + 15X

6.55 = 11X

X = 0.5955

1-X = 0.4045

So the portion of the loan lent at 4% is 21000(0.5955) = $12,505.5

And the portion of the loan lent at 15% is 21000(0.4045) = $8494.5