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The difference between two loans is $10000 both loans have

Resolved Question:

The difference between two loans is $10000 both loans have 5% annual interest rate. If the total interest is $2000 after one year, how much was each loan?
Submitted: 6 years ago.
Category: General
Expert:  JamesStone replied 6 years ago.

Ok, first we need to create an equation that properly demonstrates this scenario.

.05Y + .05X = 2000

Where

X = Y + 10000
Which equates to

(Y x .05) + ((Y+10000) x .05) = 2000

Simplify to:

.05Y + .05Y + 500 = 2000

 

Divide both sides by .05

Y + Y + 10000 = 40000

 

Subtract 10000 from both sides and simplify

2Y = 30000

Y = 15000

 

Since Y is 15000, and the second amount is Y + 10000, your loan values are 15000 and 25000. The 15000 loan accrues $750 in interest, whereas the 25000 loan accrues the remaining $1250.

 

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