Ralph Chase plans to sell a piece of property for $180000. He wants the money to be paid off in two waysminusa short-term note at 10 % interest and a long-term note at 7 % interest. Find the amount of each note if the total annual interest paid is $15600.

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Business

Tori Mcdowell

6 May, 11:25

Ralph Chase plans to sell a piece of property for $180000. He wants the money to be paid off in two waysminusa short-term note at 10 % interest and a long-term note at 7 % interest. Find the amount of each note if the total annual interest paid is $15600.

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Answers (1)

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Akira Watts · Answer 1

The amount of short term note is $100,000 and long term note is $80,000 respectively.

Explanation:

For computing the amount of each unit we have to assume the things which is shown below:

Let us assume the short term note be X which equal to 10 %

And, the long term note be $180,000 - X which is equal to 7%

So, the equation would be

0.10X + 0.07 ($180,000 - X) = $15,600

0.10X + $12,600 - 0.07X = $15,600

0.03X = $15,600 - $12,600

0.03X = $3,000

X = $3,000 : 0.03

X = $100,000

So, the short term note is $100,000

And, the long term note is = $180,000 - $100,000 = $80,000

Hence, the amount of short term note is $100,000 and long term note is $80,000 respectively.