Solve the problem.
-Andre borrowed $40,000 to buy a truck for his business. He borrowed from his parents who charge him 3% simple interest. He borrowed from a credit union that charges 4% simple interest, and he
Borrowed from a bank that charges 6% simple interest. He borrowed four times as much from his
Parents as from the bank, and the amount of interest he paid at the end of 1 yr was $1,560. How
Much did he borrow from each source?
A) He borrowed $4,000 from his parents, $35,000 from the credit union, and $1,000 from the bank.
B) He borrowed 1,500 from his parents, 32,500 from the credit union, and 6,000 from the bank.
C) He borrowed 6,000 from his parents, 32,500 from the credit union, and 1,500 from the bank.
D) He borrowed $8,000 from his parents, $30,000 from the credit union, and $2,000 from the bank.

Question

Quizplus · Accepted Answer

The total amount borrowed is $40,000. Let x be the amount borrowed from the bank. Then, 4x is the amount borrowed from his parents, and the remaining $40,000 - 4x - x = $40,000 - 5x is borrowed from the credit union. The total interest paid is $1,560, which is the sum of the interests from all sources: 0.03(4x) + 0.04($40,000 - 5x) + 0.06x = $1,560. Solving this equation gives x = $2,000, so he borrowed $8,000 from his parents, $30,000 from the credit union, and $2,000 from the bank.

Solve the Problem. -Andre Borrowed $40,000 to Buy a Truck for His Business