Question

A business has two loans totaling $85,000. One loan has a rate of 4.5% and the other has a rate of 6%. This year, the business expects to pay $4,650 in interest on the two loans. How much is each loan?

Answer 1

Answer:

$30,000 and $55,000

Step-by-step explanation:

If 4.5% loan is x, and the 6% loan is y, then:

x + y = 85000

0.045x + 0.06y = 4650

Solve the system of equations with substitution or elimination.  Using substitution:

0.045x + 0.06(85000 − x) = 4650

0.045x + 5100 − 0.06x = 4650

450 = 0.015x

x = 30000

y = 55000

Answer 2

Loan I = $ 30,000

Loan II = $ 55,000

Further Explanation

Total loan of $ 85,000

Loan I rate at 4.5%

Loan II rate at 6%

This year's loan repayments are $ 4,650

0.045 + 0.06 = 4,650

Loan II = $ 85,000 - Loan I

0.045 ($85,000-b)+0.06 b= 4,650

Loan II = $55,000

Loan I = $ 85,000 - Loan II

Loan I = $85,000 - $55,000

Loan I = $30,000

Loan I rate = $ 1,350

Loan II rate = $ 3,300

Total Loans rate (I + II) - Payments = ($ 1,350  + $ 3,300) - $ 4,650 = $ 0 (Remaining balance)

Loans are a type of debt that can involve all types of tangible objects, although usually more often are identified with monetary loans. Like other debt instruments, a loan requires a redistribution of financial assets over time between the borrower (indebted) and the debtor (the creditor).

The borrower initially receives an amount of money from the lender to be paid back, often in the form of periodic installments, to the lender. This service is usually provided with certain costs which are referred to as interest on the debt. Borrowers can also get restrictions in the form of loan conditions.

Before applying for a loan you should know how to calculate the percent interest on a loan to check the correctness of the interest calculation specified on your credit.

Learn More

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Details

Grade: High School

Subject: Mathematics

Keyword: loan, payment, borrowers