Your company took a start up loan at 5% interest. You also took a capital improvement loan for 7% interest. The start up loan is eight times larger than the improvement loan. The interest paid on both loans for one year is $9,400.
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start up is 8 times larger
interest = $9400
let start up be n and the other loan be x
5% of n + 7% of x= 9400
0.05n + 0.07x=9400
0.05 (8x) +0.07=9400
Multiply through by 100 ta make whole numbers
5(8x) +7x = 940000
40x+ 7x= 940000
Substituting in the equation gives
start up $160000 and the other $20000
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