Solve the problem.
-A loan officer at a bank has $88,000 to lend and is required to obtain an average return of 8% per year. If he can lend at the rate of 9% or the rate of 7%, how much can he lend at the 7% rate and still meet his required return?
A) $9777.78
B) $748,000.00
C) $5500.00
D) $44,000.00

Question

Quizplus · Accepted Answer

To find how much can be lent at 7%, let x be the amount lent at 7%. Then, the amount lent at 9% is $88,000 - x. The equation for the average return is: 0.07x + 0.09(88,000 - x) = 0.08(88,000). Solving this equation gives x = $44,000.

Solve the Problem. -A Loan Officer at a Bank Has $88,000 to Lend