Concept explainers
Loans To get the necessary funds for a planned expansion, a small company took out three loans totaling $25,000. Company owners were able to get interest rates of 8%, 9%, and 10%. They borrowed $1000 more at 9% than they borrowed at 10%. The total annual interest on the loans was $2190.
(a) How much did they borrow at each rate?
(b) Suppose we drop the condition that they borrowed $1000 more at 9% than at 10%. What can you say about the amount borrowed at 10%? What is the solution if the amount borrowed at 10% is $5000?
(c) Suppose the bank sets a maximum of $10,000 at the lowest interest rate of 8%. Is a solution possible that still meets all of the original conditions?
(d) Explain why $10,000 at 8%, $8000 at 9%, and $7000 at 10% is not a feasible solution for part (c).
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Finite Mathematics (11th Edition)