Posted by Julia on .
Chris takes out two loans. He borrows $800 more from a credit union that charges 12% interest than from a bank that charges 15% interest. If his interest payments total $420 annually, how much does he borrow at each rate?
assuming no compunding of interest:
borrow x at .15
borrow (x+800) at .12
.15 x + .12 (x+800) = 420
let his loan from the bank be $x
let the loan from the credit union be $(x+800)
.15x + .12(x+800) = 420
solve for x, let me know what you got.
There has to be two equations. I got 1,200 for x...
1200 and 2000 are the correct amounts.
If you really, really, want to make two equations out of this:
x = amount at .15
y = amount at .12
.15 x + .12 y = 420
y = x + 800
then substitute equation 2 into equation 1
.15 x + .12(x+800) = 420
which is where we started.