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Math Help - [SOLVED] Combined Interest Rate

  1. #1
    bpgu25
    Guest

    [SOLVED] Combined Interest Rate

    If I have 2 loans, one for $54,000 at 10.5% and another for $71,000 at 4%, what is the combined interest rate? How do I figure this out?
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  2. #2
    MHF Contributor
    Joined
    Apr 2005
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    1,631
    Interest from $54,000 @ 10.5% is:
    I_1 = 54,000(0.105) = 5,670

    Interest from $71,000 @ 4% is:
    I_2 = 71,000(0.04) = 2,840

    Total Interest is:
    I_t = I_1 +I_2 = 5,670 +2,840 = 8,510

    If the two principals were loaned as one only, and the Interest is 8,510, then:
    I_t = (54,000 +71,000)(r) = 8510
    125,000(r) = 8510
    r = 8510/125,000 = 0.06808

    In percentage,
    r = 6.808% --------****

    That is the combined interest rate.
    Last edited by ticbol; June 1st 2005 at 11:46 PM.
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