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Thread: Banking Part 2

  1. #1
    Member harpazo's Avatar
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    Banking Part 2

    Wendy, a loan officer at a bank, has 1 million dollars to lend and is required to obtain an average return of 18 percent per year. If she can lend at the rate of 19 percent or at the rate of 16 percent, how much can she lend at the 16 percent rate and still meet her requirement?

    Let x = amount she can lend at 16 percent

    x(0.16)

    I do not know what to do with Wendy's 1,000,000 dollars and how 18 percent and 19 percent play into the needed equation.

    Where do I go from here?
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  2. #2
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    Re: Banking Part 2

    Required interest revenue = 1000000*.18 = 180000

    .16x + .19(1000000 - x) = 180000

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  3. #3
    Member harpazo's Avatar
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    Re: Banking Part 2

    0.16x + 0.19(1000000 - x) = 180,000

    0.16x + 190,000 - 0.19x = 180,000

    -0.03x = 180,000 - 190,000

    -0.03x = -10,000

    x = -10,000/-0.03

    x = 333,333.33333333

    0.16x = 0.16 x 333,333.33333333 = 53,333.333333333

    Wendy can lend 53,333.33 at 16 percent.

    Correct?
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  4. #4
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    Re: Banking Part 2

    Mais oui, c'est correct!
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  5. #5
    Member harpazo's Avatar
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    Re: Banking Part 2

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