That has honestly confused me more...
You only attempted to answer half my question, and I'm 90% sure it didn't follow the equation I was told to follow...
Sorry 'bout that; let's try again. But first, I'd like to know whether you have experience solving equations. For example, can you solve the following equation for x?
0.03*x + 0.025*(5000 - x) = 132.5
Let us know, and we can go from there.
Also, I'm not sure what the two halves of your question are, but Subhotosh actually did use the formula which you posted for simple interest when he wrote P
1*0.03 (for the interest owed on the first loan) and P
2*0.025 (for the interest owed on the second loan). He just omitted the factors of t because multiplying by 1 doesn't change anything.
I = p*r*t
Symbol I stands for the interest (that is, the cost of borrowing p dollars at some rate r for t years)
Symbol p stands for the principle (that is, the amount of the loan)
Symbol r stands for the rate (that is, the decimal form of the interest rate)
Symbol t stands for the elapsed time (that is, the number of years)
In your exercise, p is unknown, for each loan (finding the principle amount of each loan is the question).
For one loan, r=0.03 (the decimal form of 3%). For the other loan, r=0.025 (the decimal form of 2.5%).
And the elapsed time is only one year, in your exercise. So t=1.
Because t=1, in your exercise, you can use I=p*r.
Now, try to solve that equation for x above, and please let us know how far you get.
By the way, in that equation, symbol x stands for the principle of the 3% loan. (We'll explain why, later.)
Cheers :cool: