Answer:
Amount of short term note = $90,000
Amount of long term note = $80,000
Step-by-step explanation:
Data provided in the question:
Total amount = $170,000
Interest rate of short term note = 10%
Interest rate in long term note = 8%
Total annual interest paid = $15,400
Now,
Let the amount of short term interest be 'x'
thus,
amount of long term interest will be ($170,000 - x)
also,
Interest on short term note + Interest on long term note = Total interest
or
⇒ 0.10 × x + 0.08 × ($170,000 - x) = $15,400
or
0.1x + $13,600 - 0.08x = $15,400
0.02x = $15,400 - $13,600
or
0.02x = $1,800
or
⇒ x = $90,000
Hence,
Amount of short term note = $90,000
Amount of long term note = $170,000 - $90,000 = $80,000
