Question

John runs a florist shop in a small arkansas town and had to borrow $170,000 to start up the shop. He was able to borrow some from the state business development office at 4% but the rest he had to borrow from a friend who charged him 8%. The first year John paid $9800 in interest. How much did he borrow from his friend?

Answer 1

If he borrowed $x from his friend at 8%, then the rest (170000-x) is at 4%. So, now you have

.08x + .04(170000-x) = 9800
x = 75,000