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. If the interest paid on both loans for one year is $9,400, how much did the company borrow for each loan?

To answer the question above, we let 8x be the amount loaned with 5% interest and x be the amount loaned at 7% interest. The amount of interest is calculated through the equation,

I = amount x rate

The sum of these interest should be 9,400. The equations that would best represent the given scenario are,

(8x) (0.05) + x (0.07) = 9400

The value of x from the given equation is,

x = 20,000

Therefore, the company loaned $160,000 with 5% interest and $20,000 with 7% interest.