Question

Manuel borrowed a total of $4000 from two student loans. One loan charged 4% simple interest and the other charged 3.5% simple interest, both payable after graduation. If the interest he owed after 1 year was $150, determine the amount of principal for each loan.

Answer 1

Answer:

the principal amount at a rate of 4% is 2000

principal amount at a rate of 3.5% is 4000-2000 =2000

Explanation:

We have given total amount borrowed = $4000

Let x amount is borrowed at a rate of 4%

So $4000-x is borrowed at rate of 3.5%

Total interest = $150

We know that simple interest $=\frac{principal\ amount\times rate\times time}{100}$

So $\frac{x\times 4\times 1}{100}+\frac{(4000-x)\times 3.5\times 1}{100}=150$

$4x+14000-3.5x=15000$

0.5 x=1000

x = 2000

So the principal amount at a rate of 4% is 2000

And principal amount at a rate of 3.5% is 4000-2000 =2000