Question

You have two loans, for 2 years each. The total interest for the two loans is $138. On the first loan, you pay 7.5% simple interest on a principal of $800. On the second loan, you pay 3% simple interest. What is the principal for the second loan?

Answer 1

Answer:

$300

Step-by-step explanation:

We are told that you have two loans, for 2 years each. The total interest for the two loans is $138. On the first loan, you pay 7.5% simple interest on a principal of $800.

Let us find the amount of interest for 1st loan.

$I=Prt$, where,

I = Amount of interest,

P = Principal amount,

r = Interest rate in decimal form,

t = Time

Let us convert our given rate for 1st loan in decimal form

$7.5\%=\frac{7.5}{100}=0.075$

$I=\ 800*0.075*2$

$I=\ 800*0.15$

$I=\ 120$

Now let us find the amount interest for 2nd loan.

$\text{Amount of interest for 2nd loan}=\ 138-\ 120$

$\text{Amount of interest for 2nd loan}=\ 18$

Let us convert our given rate for 2nd loan in decimal form

$3\%=\frac{3}{100}=0.03$

Upon substituting our given values for 2nd loan in interest formula we will get,

$\ 18=P*0.03*2$

$\ 18=P*0.06$

$\frac{\ 18}{0.06}=\frac{P*0.06}{0.06}$

$\ 300=P$

Therefore, the principal amount for the 2nd loan is $300.

Answer 2

Hi there! Interest on the first loan is 800×.075×2=120. The interest on the second loan is 138-120=18. Now, we have to use the simple interest formula. 18=P×.03×2=300. Therefore, the answer is $300.